Balancing The Books

Lawmaker introduces constitutional amendment to balance state reserves

A state senator wants New Mexico to adopt constitutional amendment that would require daily accountability for its checkbooks.

As SFR reported last week, the state's own estimates of its cash reserves could be off by as much as $460 million. The problem dates back eight years to a switch in accounting system. To this day, certain modules and components of the state accounting system, SHARE, haven't been implemented.

That's led to inaccurate financial statements of the state's reserves, which are similar to a savings account for the state. While New Mexico lawmakers draw the yearly state budget mainly from oil and gas revenue, state reserves act mainly as a backup fund from a more solid source.

And New Mexico can't get a handle of how much money is actually in this fund. The state Department of Finance and Administration concluded that the estimates are off by $100 million. The State Auditor's Office estimates it ranges between $70 million to $460 million.

Either way, state Sen. George Munoz, D-Cibola, says it's a big problem.

"We're the only state that doesn't see a balance in our checkbook," he says.

Munoz wants to see state officials tracking state expenses on a daily basis. He says the situation should work no differently than balancing personal bank accounts.

"If your bank account is $10 and you write nine $1 checks, at the end of the day your register is going to show $1 in that account," he says.

Still, his bill faces hurdles. It's been given the three-committee-referral "kiss of death," meaning it'd have to pass three Senate committees before a full Senate vote. The language of the proposed amendment would read:

  • The state treasurer and the executive financial control agency shall reconcile all of the state's cash accounts each day and shall provide periodic reports as provided by law to the governor and the legislature on the condition of the state budget.
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