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The immediate attention of the next governor and, therefore, the attention of the general election candidates, should focus on a number: $236 million. That’s the difference between forecast general fund revenue for the next budget year, fiscal 2012, and the amount needed to maintain current service levels. (The general fund is the principal source of money for state government.)
The $236 million figure was unveiled May 20 by Tom Clifford, chief economist for the Legislative Finance Committee. Clifford spoke to a conference held by the New Mexico Tax Research Institute.
The budget, uh, challenge comes with a big change from the past couple of years. The federal stimulus Duct Tape that has bandaged the state budget is gone.
The Duct Tape, under the monikers of “one time funds” and “one time savings” totals $480 million. So the real number is $716 million.
So, dudes, what are you gonna do? Specifically?
And what are you going to do, specifically, about the other two revenue/spending disasters—transportation and pensions.
Corruption is the only other big and relevant issue in the campaign. Handling corruption depends largely on the character of the new governor.
The terrible condition of the state economy may be big in polls, but the governor can do little about it because the national economy largely determines the state economy.
The private and federal government sectors of the New Mexico economy produce the money for state government’s general fund. The federal sector is included here because those federal funds nearly all come from elsewhere. Traditionally for the administration and legislature to spend, there has been recurring revenue, one-time income and new money. For now, forget the latter two.
Clifford told the conference, “Our sense of our recurring revenue is a little fuzzy, to put it as politely as possible.”
Recurring revenue growth for both fiscal 2011, the current budget year, and fiscal 2012 is forecast at 6 percent. The figure has some saying, “You gotta be kidding.” That 6 percent derives from a December 2009 estimate of 1.6 percent wage job growth for fiscal 2012. By April 2010, the estimate had dropped by more than half—to 0.7 percent. The personal income growth estimate is down from 3.2 percent to 1.6 percent.
Further, that fiscal 2012 wage job growth estimate looks in trouble from here. Wage jobs dropped 1,800 from March to April and 15,500 for the year. The hole gets deeper. Two sectors did grow from April to April—government and education and health services. Census workers drove the government growth, but those jobs end in July. State and local government increased, too, a mystery given the state and local financial situation.
From the remaining candidates for governor, I seek substance in the dialogue between now and November. Offend the pious. Be “negative.” That’s fine. Attack. Entertain. Get our attention. Just offer us real ideas.
For the Democrats, Diane Denish has started on substantive ideas. She has a jobs plan that sounds like the government doing things and a reorganization plan that already has drawn opposition.
The time of Susana Martinez has been occupied with false issues, such as a promise to “truly reinstate the death penalty.”
The death penalty, banned here in 2009, isn’t coming back. A governor investing political capital in the issue would be a fool. Returning the death penalty would blow any reputation for fiscal responsibility because each case would cost millions.
Martinez also panders on border security. On a campaign mailer, she demands, “Repeal the law that provides Drivers Licenses for Illegal Immigrants.” At best this matter is a detail.
So, candidates, get real. Say how you will solve the problem of that $716 million. Don’t insult us with false issues.