Budgets share the same pain

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By Hal Rhodes

Few New Mexico lawmakers walked away from the Roundhouse enamored with the state budget they were leaving behind to Gov. Bill Richardson’s tender mercies after adjournment of last week’s special legislative session.

It had been a textbook case of the state Legislature at work on a budget grievously out of balance: bickering and complaining while the difficult decisions were being made, followed by the obligatory post-session congratulatory platitudes when it was over.

Even some of the complainers knew deep down that the formula they had settled on for upping certain taxes (including the cigarette tax by a whopping 75 cents per pack) and cutting many state agencies’ funding was the best of the bad options they had at their disposal when it came to balancing expenditures against anticipated revenues in the midst of the Great Recession.

They knew, too, that whatever they did would be unpopular in sundry quarters. And, sure enough, Republicans bellowed about the tax hikes, and advocacy groups worried about program cuts that will harm children and the poor and disadvantaged.

If misery does indeed love company, New Mexicans will find plenty of it around the country where the same chorus of complaints is erupting in virtually every state in the union.  

Even as New Mexico legislators were converging on Santa Fe for their budget session on March 1, lawmakers in Arizona, Oregon, Nevada and Tennessee were already back in their own state capitols for special sessions where budgeting was the principal task before them.

Later this summer the legislatures of Idaho, Illinois and a number of other states are scheduled to convene in yet more special sessions for the purpose of wrestling with their own budget imbalances.

They are ubiquitous, these budget miseries that are afflicting our states.

California, notorious for chronic budget shortfalls, faced a 2010 General Fund budget gap of perhaps as great as $20 billion. New York’s was $3.2 billion; Arizona’s was $1.9 billion and Kentucky’s was $1.2 billion.

Viewed from afar these budget imbalances reaching into the billions of dollars make New Mexico’s roughly $500 to $600 million deficit look like small potatoes by comparison.

The trouble is there’s no such thing as small potatoes when confronting a multimillion dollar budget shortfall in an economy as weakened as the one we have on our hands today.

And by all accounts the situation in fiscal 2011 will hardly be better for the states’ governors and legislatures when the next budget making time comes around.   

Just before state lawmakers returned to Santa Fe for their recent special session, the Center for Budget and Policy Priorities issued a major report estimating the several states’ projected budget deficits for FY 2011, with New Mexico’s anticipated shortfall easily topping $300 million. California’s projected 2011 gap exceeds $12 billion; Arizona’s 2011 deficit will rise above $2 billion.

And the beat goes on, the reports says: “The worst recession since the 1930s has caused the steepest decline in state tax receipts on record.” As a consequence, “even after making very deep cuts, states continue to face large budget gaps.”

Ominously, the Center for Budget and Policy Priorities also warns that the states’ responses to their budget woes could actually slow economic recovery.

It’s an irony this reporter noted last November: When you hike state taxes and cut state spending, you take that money out of taxpayers’ and consumers’ pockets which otherwise would have flowed into the economy, this even as federal stimulus funds are expected to dwindle.

Such are the wages a nation pays for getting suckered into economic policies which put foxes in charge of hen houses.