New Mexico has been on a spending spree over the last four fiscal years. The Richardson record is now clear: The general fund budget has increased by 31.2 percent. When adjusted for inflation and population growth, the budget has grown by 13 percent. That means New Mexico is spending 13 percent more in current dollars (FY2007) per person than it did four years ago.
The general fund budget in FY2003 was $3,873,944,000; and this year (FY2007) it is $5,084,063,000. If we could have held government growth to inflation plus population growth, then $659,771,000 would be available for the hard working taxpayers. That is enough money to have eliminated our personal income tax altogether. Or we could have lowered the statewide gross receipts tax rate from five percent to three percent.
Of particular concern is the growth of welfare. We seem to be very good at rewarding unproductive behavior while punishing work and saving. The budget for Medicaid has increased by over 40 percent in current, per capita dollars! The remainder of Health and Human Serivces has increased by over 22 percent. As a percentage of the general fund budget these welfare programs now consume 23.9 percent compared to 20.9 percent four years ago. Now we are being told to expect another major expansion of Medicaid while no one notices why what we have doesn’t work very well as they engage in more wishful thinking.
More detailed explanations of the budget data appear below the fold. Contact me if you have any questions.
General Fund Budget in FY03: $3,873,944,000
General Fund Budget in FY07: $5,084,063.000
Population Growth over the most recent four years: 5.2 percent
Total inflation over the most recent four years 13.0 percent
(source BEA and BLS)
Medicaid Budget in FY03: $395,790,000
Medicaid Budget in FY07: $629,400,000
Bottom LIne: Medicaid has grown by 7.1 percent annually in real, per capita dollars
Health and Human Services in FY03: $415,406,000
Health and Human Services in FY07: $583,542,000
Bottom Line: HHS has grown by 4.5 percent annually in real, per capita dollars
Public and Higher Education have grown at an annual rate of 1.6 percent in real, per capita dollars. Here are their budget numbers:
PUBLIC EDUCATION in FY03: $1,808,568,000
PUBLIC EDUCATION in FY07: $2,279,995,000
HIGHER EDUCATION in FY03: $601,715,000
HIGHER EDUCATION in FY07: $759,194,000