Budget cuts, tax hikes on horizon

By Steve Terrell and Kate Nash: The New Mexican

There’s a mountain of need in New Mexico. The problem is, there’s only a molehill of money to meet those needs.

The state faces a projected budget deficit of $600 million or more next year. This is what the Legislature is up against when New Mexico’s citizen lawmakers convene Tuesday in Santa Fe for a 30-day session.

For the second year in a row, the Legislature must grapple with a widening budget crisis caused by decreasing tax revenues. It seems like a different epoch when, back in 2008, the state was dealing with a budget surplus by sending $25 or $50 tax rebate checks to New Mexicans.

Now there are more budget cuts in store and tax hikes for New Mexicans — if only temporarily — on the horizon. Some senators are calling for repeal of Gov. Bill Richardson’s 2003 income-tax cuts — tax cuts that became major campaign bragging points when Richardson ran for re-election and for president. Among other proposals on the table, House Speaker Ben Lujan, D-Nambe, is talking about boosting the gross-receipts tax rate.

Thousands of state employees, already taking a series of furloughs to save payroll expenses, could see further pay cuts.

For Richardson, this will be his last regular session. He’s legally prohibited from seeking a third consecutive term. Richardson’s “legacy” is very much on his mind and he’s vowed to load the Legislature with proposals such as legalizing domestic partnerships, helping the renewable energy industry, ethics reform and further toughening the laws against drunken driving and domestic violence.