State officials see no imminent cuts from slowdown

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By Associated Press


SANTA FE, N.M. (AP) — There's no looming rollback of programs administered by state government because of the continued federal shutdown, but lawmakers starting to work on next year's budget worry that New Mexico's economy could be weakened by a prolonged stalemate in the nation's capital.

State Budget Division Director Michael Marcelli said Friday there's no discussion within Gov. Susana Martinez's administration of possible furloughs of state workers whose jobs are funded with federal money.

"Paychecks are coming out next Friday for state workers, and everyone is getting paid even if you're on a federal grant," Marcelli said.

Federal money fully funds about 1,800 out of the state's total workforce of more than 22,000. Officials in the Department of Finance and Administration are trying to determine how many state workers are partially paid for by federal grants and when those dollars will run out.

Despite the continued shutdown of some federal government operations, Marcelli said there are no imminent cuts to public education or at state agencies. He said most agencies have enough flexibility in their budgets to deal with the short-term disruption of federal aid. In some cases, agencies can tap into state money to cover costs or they may have a balance of federal money that can cover services and salaries.

The current budget calls for spending about $5.9 billion in state revenue and about $6.1 billion in federal aid in the fiscal year that runs through next June.

The federal government has announced it will provide money through the end of this month for a nutrition program that serves about 59,000 New Mexicans. However, the state Department of Health said benefits will continue beyond that because New Mexico has more than $1 million in federal aid for the Women, Infants and Children program, known as WIC, that's carried over from a previous year.

The agency said it's uncertain how long the money will keep the program operating, but state budget officials said it should last at least another month.

Because of the shutdown, Health Department officials said, WIC recipients will be limited to one month of benefits rather than two or three months as in the past.

Sen. John Arthur Smith, a Deming Democrat and chairman of a Senate committee that handles the budget, said he's concerned that if the federal shutdown continued it could hurt the state economy, which only recently has started recovering from the recession.

If the economy falters it could mean lower-then-expected revenue collections for state government, which could force legislators to reassess their spending decisions.

"I've been pretty apprehensive given the uncertainty of the time. When you're struggling to recover your revenue stream and then this hits, it makes you a little leery, a little bit more careful," said Smith, who is vice chairman of the Legislative Finance Committee.

The committee already has started work on drafting budget recommendations for next year, and Rep. Luciana "Lucky" Varela, the panel's chairman, said legislators may have to set aside a pool of money as a contingency against problems from a continued federal shutdown and to help offset across-the-board federal sequester cuts that could happen next year.

"Eventually when they settle the shutdown in government, are we going to lose additional federal dollars? We may to make up those dollars with state funding or eliminate some of these programs," said Varela, a Santa Fe Democrat.