Lawmakers look for ways to fix budget

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By Ralph Damiani

According to the Associated Press, state lawmakers looking to patch the huge hole in this year’s budget have a pot of money in front of them, but dipping into it may not be as easy as it sounds.

Every year, hundreds of millions of dollars are approved by the Legislature and the governor for capital improvements around New Mexico.

These run from vans and buses to baseball fields to highway interchanges to entire buildings on college campuses.

And it can take years for the money to be spent.

Of the $3.7 billion appropriated from 2002 through 2008, $1.7 billion targeted for more than 7,000 projects hasn’t been used yet, according to a report released this month by the Legislative Finance Committee.

On many of those projects, there has been some progress – financing has been finalized, for example, or planning and design are under way.

But nearly 3,000 projects approved prior to this year, accounting for $673 million, have seen no activity or spending at all, according to the report.

Local governments or state agencies may be waiting for other funding sources to come through. Or the amount allocated may be way too small, requiring years of appropriations before a project can start.

Or there may be legal problems, or simply foot-dragging.

But with a $454 million shortfall this year, the governor and legislative leaders agree that the unspent funds are a logical place to go rooting around for part of a deficit reduction fix.

And fix things we must. With the continuing decline in extraction prices, the state is facing a real budget crisis.

Especially since  a lot of new funding was approved expecting oil prices to stay high.

They did not, revenue fell dramatically and we are now in a pickle.

But there are other places to cut.

“The other option is to take it out of education and health care,” which lawmakers want to avoid, Senate Finance Committee Chairman John Arthur Smith, D-Deming, told the AP.

But legislators cherish the opportunity to funnel capital money back to their districts; it can help constituents, as well as their own re-election chances.

If capital outlay they sponsored is unspent, they'd rather have it shifted to other projects in their districts, which is commonly done.

There’s sure to be squawking, then, when their stalled projects end up on a hit list in the near future.

“It’s fine to take it from someone else, but not from me,” is the refrain Smith says he expects to hear as legislative leaders look for about $150 million in unused capital funds.

Gov. Richardson may even be part of that chorus. One big chunk of unspent money – more than $21 million – that lawmakers already are eyeing is for an equestrian center the governor wants for rodeo events and horse shows.

Yet, he is on his way out. And he leaves us in a real mess.

He originally proposed it for the Mesa del Sol development south of Albuquerque. But with the Downs at Albuquerque race track planning to move from the state fairgrounds to Moriarty, Richardson now wants to make the equestrian center part of a redeveloped fairgrounds.

Finance and Administration Secretary Katherine Miller says the project should be left untouched. She argues that it's a jobs creator, that it efficiently answers the need for both an equestrian center and a revitalized fairgrounds, and that it has shown progress, with some design already done.

Miller’s agency is trying to ascertain the current status of each capital outlay project. Some of the nearly 3,000 identified as inactive may, in fact, be under way – it’s just that reimbursement hasn't yet been sought, she said.

Miller says this is an opportunity for the state to identify projects that aren’t moving and aren’t likely to move.

“I think we should look at every single one of them,” to see whether the money could be used instead to shore up the general fund, she said.

The Richardson administration has complained for years that the system of divvying up capital money into small pieces for projects in lawmakers’ districts is ineffective and short-sighted.

Rep. Edward Sandoval, D-Albuquerque, told the AP he’s concerned about the Legislature’s “going willy-nilly in there and just start taking money out of projects.”

“These projects are an economic driver,” said Sandoval, who for years has headed a panel that puts together the annual capital financing package.

Rep. Luciano “Lucky” Varela, D-Santa Fe, vice chairman of the Legislative Finance Committee, told the AP lawmakers will begin discussing the capital outlay portion of the solvency plan even before session begins Jan. 20.

He said they’ll be careful not to interrupt projects on which there has been any progress.

And for lawmakers who may balk at having to give up funding for a stalled project, he offers this perennially unpopular option:

“We can raise taxes, if they want.”

And while that is the least popular option, it just may be the one they use.