At noon EST, on Jan. 20, 2009, Barack Obama will swear the oath of office on the Lincoln Bible and deliver his inaugural speech to millions of crying, cheering and chanting spectators on the Capitol Mall.
Two hours later, at noon MST, the New Mexico Legislature will be sworn in before hundreds of family members, friends and distinguished guests. One can only hope the televised version of Obama’s speech fills them with the same spirit of unity as the live version because, as soon as the festivities are over, out comes the weaponry.
The 70 representatives and 42 senators will need to cut, chop and gouge almost half a billion dollars immediately from this year’s spending. Furthermore, they will do it under the watchful eye of Gov. Bill Richardson, whose decision to bow out of a cabinet appointment may thwart the best-laid plans of legislators and lobbyists.
In a word, UNM Professor of Political Science Christine Sierra says, the session has suddenly become “contentious.”
But for progressives, there is some reason to feel optimistic. The Republican leadership suffered major down-ballot casualties in the 2008 election season, while Democrats picked up three seats each in the state House and Senate. While new spending is unlikely, watchers do believe the new makeup could mean back-burning progressive initiatives such as increasing corporate taxes, allowing domestic partnerships, repealing the death penalty, beating back Big Oil and reforming ethics may finally come to fruition.
Here’s the lowdown on the issues at stake, the politics driving them and the opportunities the ’09 session could provide.
BUDGET: TAX & SPEND
The issues: How did we get half a billion dollars in the hole?
The answer, according to David Abbey, director of the Legislative Finance Committee: “the double whammy of oil and gas falling and the broad economic weakness.”
Last summer, natural gas prices spiked, gasoline prices topped $4 per gallon, and T Boone Pickens predicted oil would hit $200 per barrel. While American drivers emptied their wallets into their gas tanks, taxes on oil and gas were flowing steadily into the state’s coffers.
And the governor and the Legislature began spending it, basing the budget on the assumption that the prices would hold.
They did not. They plummeted back to today’s buck-something levels. Good for the driver, bad for the state. If the Legislature doesn’t come up with a “deficit reduction” plan, core services could be on their knees by next summer.
Then, once 2009’s hole is patched, the Legislature gets to start crafting next year’s budget.
The politics: “Everything’s on the table,” Rep. Lucky Varela, D-Santa Fe, vice chairman of the LFC, says. “We can’t cut some at the expense of others. Everyone has to give a little.”
The first to go will be pork projects that haven’t been started yet, including chunks of the governor’s transportation master plan. It’s likely, Varela says, that employment vacancies will remain empty as legislators search for unspent fat in every agency’s operating budget. They may even raid the reserves.
“Any time you have a situation of economic scarcity, as opposed to surplus, that’s just going to engender more contentious politics,” Professor Sierra explains. “So, with Bill Richardson coming back, with no money to really push an aggressive agenda forward, both he and the Legislature are faced with budget decisions that are going to be distasteful or painful.”
Plus, when it comes to conserving resources, the Legislature is seriously out of practice. According to Abbey, the state has grown its budget 6 to 10 percent each year for the last decade.
“Cutting 5 percent after growing 6 percent…that’s a wrenching challenge for the governor and the Legislature,” Abbey says.
Challenge, shmallenge—Sen.-elect Peter Wirth, D-Santa Fe, says it’s an opportunity. When everything is on the table, that also includes unpopular, controversial and powerfully opposed bills. In Wirth’s case, it’s a tax bill that would eliminate a loophole allowing multi-state corporations to pay lower rates than New Mexico-based companies. As in the past (he has introduced it four times in the House), it’s not going to be popular with fiscal conservatives and out-of-state business interests.
However, this year, the Legislature’s desperation may drown out the arguments from corporate lobbyists.
“Quite frankly, you’ve got to look at a situation like this as an opportunity to address certain things with respect to revenues that you might not be able to do in a different environment,” Wirth says. “These are the kind of things that are out there that we should seriously consider. The corporate-tax bill would generate potently $90 million. That number may be less because corporate taxes are down, but that’s an example of being creative.”
The opportunities: If you’ve got the stamina for marathon panels on complex budget maneuvering, you could attend all three days of the Legislative Finance Committee’s pre-session meeting, Jan. 14-16. However, the discussion over specific budget cuts will take place between 8:30 am and lunchtime on Jan. 15 in Room 322 of the Capitol. The LFC’s budget recommendations can be viewed online.
Politics Online—Keep up with the Legislature, virtually
What it’s Wirth—Santa Fe’s freshman senator talks transition