New Mexico’s Budget Crisis: “It’s No Laughing Matter” (RADIO SPOT)

With the prospect of a special session of the legislature fast approaching to address a looming budget crisis, the Center for Civic Policy is running this radio ad in selected areas of the state which offers our take on the issue and calls upon constituents to take action:

A thirty-second radio spot can hardly do justice to this fiscal train wreck. A bit of context is in order.

The State of New Mexico faces a serious budget deficit as the result of a shortfall in revenues. Revenue projections made back in January were overly optimistic, it seems. It now appears certain that Governor Martinez soon will call a special session of the legislature to fix a growing budget crisis.

The Governor’s answer is a 5 percent across the board cut in funding for state agencies. New revenues are off the table, she says.

To call this approach unwise would be an understatement. How about unconscionable.

Consider these facts about the quagmire in which New Mexico finds itself:

  • 49th in child poverty
  • K-12 funding is nearly 11% less per student than pre-2008 recession levels
  • 7,000 fewer children fewer children receive child care assistance than in 2010
  • Medicaid was already underfunded this year by $86 million, causing cuts of over $400 million in health care services when lost federal matching dollars are included.
  • Low- and middle-income New Mexicans pay twice the rate in state and local taxes as the richest 1 percent.

We could go on and on.

Low oil prices are cited as the cause of the crisis. But overlooked in the midst of all the hand-wringing, are the horribly irresponsible tax policies enacted in recent years.

The cold hard truth of the matter is this: The Governor is determined to protect her prized corporate tax giveaways by making New Mexico’s working families pay for them.

In 2013 Governor Martinez and the legislature gave huge tax cuts and tax breaks to large corporations, many of them out-of-state. These so-called “business incentives” were supposed to cause an explosion of job creation.

Well, it hasn’t worked. They just took the money and ran.

Today New Mexico has the 3rd highest jobless rate in the nation.

It stands to reason that our continuing underinvestment in education and healthcare is making New Mexico a less than desirable place for companies that are looking for a place to relocate.

A better answer is for legislators to say “no” to more cuts. It’s time to make corporations and the well-connected pay their fair share.

 

Senate passes food stamp supplement, unemployment bill

By Matthew Reichbach

The state Senate moved on from redistricting and passed a bill to shore up the unemployment fund as well as the food stamp supplement. Both measures cleared the Senate with significant support, though a competing Republican measure on the unemployment took up much of the time spent debating the legislation.

Republicans introduced a floor substitute that nearly all Democrats said was not a good policy for the state.

The substitute brought by Sen. Steven Neville (R-Aztec) would have transferred money from the general fund to shore up the unemployment fund. Democrats said that this was borrowing from the general fund, which is not allowed by law.

Sen. John Arthur Smith (D-Deming), the sponsor of the original bill, objected to the substitute because it would put the state in debt. Smith also said that the state has never borrowed from the general fund.

Sen. Jerry Ortiz y Pino (D-Albuquerque) said that borrowing money from the general fund was a “slippery slope” and Sen. Tim Keller (D-Albuquerque) said if this was allowed then he was going to “run a lot of bills like this.”

Neville defended his substitute, saying it was constitutional and necessary.

“This is not about greed or being selfish or taking money from schoolkids,” Neville said. Neville also said that a bill that borrowed from the state’s tobacco fund set the precedent for his substitute.

This bill is necessary during the special session because a similar bill that passed both chambers during the regular session was partially vetoed by Gov. Susana Martinez. The issue went to the state Supreme Court and the Supreme Court said that the legislature and the governor should attempt to find a solution before the court ruled.

The bill itself passed the Senate with only three dissenting votes.

The bill to fund the food stamp supplement passed unanimously.

ABQ rally calls for jobs, not cuts

By Matthew Reichbach

A rally of about 150 people in downtown Albuquerque called for the federal government to stop cutting services and instead focus on jobs. The rally, one of hundreds across the nation organized by the progressive organization MoveOn.Org, was given a shot in the arm by the recent debate in Congress over spending.

The event was a kickoff of sorts according to Greg Sandoval, a regional organizer for MoveOn.org and one of the organizers of the rally. A number of progressive organizations unveiled the “Contract for the American Dream” this week. The contract is “ten critical steps to get our economy back on track,” which includes investing in America’s infrastructure, ending the wars in the Middle East and securing social security.

Sandoval said the number one thing that people at the rally wanted was to work.

“They want a strong America,” Sandoval said in an interview with Clearly New Mexico. “They don’t want to be collecting unemployment. They don’t want to be on welfare. People want to work.”

While many speakers focused on what they believed Congress and President Barack Obama should do, State Senator Jerry Ortiz y Pino, D-Albuquerque, gave an example of something he thinks should be done during the upcoming special session.

Ortiz y Pino says that the legislature should pass the severance tax bond issue but only include projects that would create New Mexican jobs.

“We should only be spending that money this year on things that put New Mexicans to work,” Ortiz y Pino told the crowd. “They want to work. They’ve got a lot of energy, a lot of talent, we’ve got to get them back to work.”

Ortiz y Pino gave an example of “software programs put together by a consulting company in another state” as an example of something that the legislature would take out of the severance tax bond issue.

“It’s a small step, but when we start taking enough small steps, we’re actually going to turn this thing around and make the American dream realizable once again,” Ortiz y Pino said.

State Senator Eric Griego, D-Albuquerque, spoke to the crowd and invoked former president Franklin Delano Roosevelt, or FDR, who presided over the United States emergence from the Great Depression.

“What FDR said, and he said it in pretty clear terms, was we cannot turn our government over to corporations,” Griego said to cheers from the crowd.

Griego also said that government has a role in rebuilding the economy.

“When times are tough, you don’t turn government away from people,” Griego declared. “You turn government and public servants towards people. You put them to work by rebuilding the economy. By rebuilding our roads and our schools and our bridges and our green infrastructure.”

Homemade signs at rally echoed the statements of many of the speakers.

One, held by a charter school teacher fresh off of his first day of classes, said that the government should be funding “schools, health care, jobs — not the war machine!”

New Mexico’s Empty Unemployment Rate Drop

By Matthew Reichbach

Despite headlines that the unemployment rate in New Mexico dropped to 6.8 percent in June, digging into the numbers shows the jobs situation in New Mexico remains dire.

The Santa Fe New Mexican noted that New Mexico ranked 50th in job growth. That’s dead last in the nation. Winthrop Quigley of the Albuquerque Journal said the numbers on jobs “are conflicting” and that “at least some employment data show New Mexico mired in a recession.” And the Santa Fe Reporter wrote that the numbers “don’t add up.”

Why?

Gerry Bradley, an economist and research director for New Mexico Voices for Children, told Clearly New Mexico that the unemployment rate largely reported in the media is “irrelevant” and that “no economist takes the unemployment rate as a good indicator of where the economy is going.”

Instead, Bradley suggests looking at the numbers from the Current Employment Statistics, or CES.

“The CES is a fairly large survey of employers in the state,” Bradley suggested in a phone interview with Clearly New Mexico. “At the same time that the Bureau of Labor Statistics is running this one program to get the unemployment rate, they’re running another survey that gives you employment data.”

Looking at this data paints a different picture from the unemployment rate that the media concentrates on.

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Interim Watch: Unemployment Insurance Fund (In)Solvency

By Charlotte Chinana

The Legislative Finance Committee met in Socorro Thursday to hear not only the latest projections for state revenues, but also the status of the unemployment insurance fund in the wake of Governor Martinez’s partial veto earlier this year of legislation that would have fixed the problem. A panel presentation on the subject pretty much says it all:  “Unemployment Insurance – Where are we headed in 2012? Insolvency, Federal Loans and Employer Contribution Increases.”

Celina Bussey, Cabinet Secretary for the Workforce Solutions Department (WSD), gave a detailed presentation about the unemployment outlook for New Mexico.

According to her office, as of May, the state’s average unemployment rate was 6.9%, and it has been steadily declining over a three-month period.

However, while the overall certified unemployment insurance claims have decreased during that period (from approximately 66,000 to 36,000), the state isn’t seeing a similar overall decline in initial claims being filed on a weekly basis. Moreover, there is a gap between people who are unemployed, and people who are unemployed and collecting unemployment benefits.

Secretary Bussey stated that, since the state trends tend to mirror federal trends – with a lag – there’s a concern that we might see an uptick in the unemployment rate in New Mexico.

Officials from WSD highlighted the fact that unemployment compensation payments have more than doubled by fiscal quarter since 2009, and that during peak periods (over the past two years) daily payments have hit the $1 million dollar mark. While the state had projected to pay out approximately $16 million in benefits for the 2011 fiscal year, the actual figure was closer to $17.2 million.

To address this shortfall, the state is looking into various scenarios, including increasing employer contributions, and taking out a loan from the U.S. Department of Labor). In addition, changes are to the reporting system are being contemplated to identify potential instances of overpayment, while ensuring that work search requirements are being met.

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