Lowlights from the LFC’s Pre-Session Look
The governor’s released her proposed budget for fiscal 2018, but veteran New Mexico policy wonks know that the Legislative Finance Committee’s fiscal recommendations are at least as important as the chief executive’s spending plan. It’s always interesting to see the priorities of revenucrats and approprocrats in Santa Fe, as well as their predictions about where the state’s economy and fiscal policy are headed. Of particular note in the LFC’s “Legislating for Results: Policy and Performance Analysis”:
* It appears that New Mexico has “finally … hit bottom for job losses in the mining sector,” with oil-and-gas employment stabilizing. But “other industry sectors are now faltering, resulting in total year-over-year job losses for September and October 2016.” Thus, while the economic forecast is weak, “the revenue forecast is even weaker.”
* The LFC is recommending “recurring appropriations from the general fund” of $6.052, assuming “$123.3 million in new revenue, additional spending reductions, or both.” Remember, though, that the general fund is just one portion of overall expenditures. Counting transportation spending, quasi-public entities, and federal monies, the true figure is roughly three times as much as the (widely quoted) sum for the general fund.
* The LFC wants $2 million “in recurring funding” for the “Job Training Incentive Program.” But in some good news for taxpayers, the committee’s recommendation “does not provide additional funding for Local Economic Development Act funds due to fund balances of $29 million as of November 2016.”
* “Available capital capacity in 2017 is at an all-time low, less than $65 million after solvency measures enacted in the 2016 legislative special session.” But state agencies and local governments have requested “$1.7 billion [emphasis added] for capital projects, including $588 million for water, transportation, quality of life (libraries, parks, senior centers, community and cultural centers, etc.), environment (utilities, landfills, clean energy, solid waste, etc.), and public safety.” In response, LFC staffers think legislators might want to “consider reviewing and reauthorizing inactive capital outlay projects.”
* The LFC continues to act as an advocate for, rather than an impartial analyst of, “early childhood education.” Ignoring the substantial evidence that preschool and related programs provide temporary benefits at best, the committee claims that “early care and education programs have been shown to increase school completion rates and each high school graduate, LFC and other studies show, produces benefits of $278 thousand for the graduate and $100 thousand for taxpayers and other beneficiaries, compared with a non-graduate.”
* Single-payer hasn’t yet been “achieved” in the state, but it’s almost halfway there. In fiscal 2018, more than “928 thousand New Mexicans” will be on Medicaid, which provides “comprehensive medical care, including hospitalization, doctor visits, pharmaceuticals, vision services, and dental services.” Nearly a “quarter of the recipients are newly enrolled adults who became eligible with the expansion of Medicaid under the Affordable Care Act.”
* Despite “public safety investments over the last five years,” the Land of Enchantment remains “among the most violent states in the nation, with the second highest rate of rape and fourth highest rate of aggravated assault.” (No mention of Albuquerque’s soaring murder rate.)
* “The constitutional mandate to balance expenditures with available revenues may require consideration of new revenue options.” Translation: Lawmakers should be looking at tax hikes. You’ve been warned!