New Mexico State University is preparing for an increasingly likely additional reduction in state funding that could necessitate more budget cuts — or increases in tuition and fees.
Many say additional cuts to higher education funding are inevitable. The state is facing a shortfall of $458 million in the current fiscal year, which began July 1, according to updated revenue projections released last week.
The state also ended the last fiscal year $131 million in the red. Lawmakers plan to meet in a special session, likely next month, to address both shortfalls.
Gov. Susana Martinez, a Republican, insists that she won’t consider raising taxes to reduce the need for cuts. Though many lawmakers, particularly Democrats, want to consider tax hikes, there aren’t likely enough votes to override a Martinez veto.
Which leaves significant cuts as the only apparent option. The state may use its $219 million Tobacco Permanent Fund, which comes from settlements with tobacco companies, to help plug the budget shortfalls, but it’s not nearly enough.
Because of Martinez’s opposition to tax increases, “you have no choices,” said state Sen. Joseph Cervantes, D-Las Cruces. “I think our universities and colleges and all the families that support them are going to have to increasingly shoulder the burden.”
“That’s frankly why the response from the Legislature so far has been to ask the governor what she proposes,” Cervantes said.
The Governor’s Office hasn’t responded to two emails seeking comment. Martinez has already directed state agencies under her direct control — which don’t include NMSU — to reduce spending by 5 percent. She’s urged agencies not under her control to do the same.
Negotiations between the governor and legislative leaders about how to balance the budget have largely been held in secret. Martinez has said she wants lawmakers to call a one-day session to essentially show up and vote on a proposal that is worked out in advance.
NMSU is already making plans.
“We cannot wait until next year to become fiscally conservative because we would not have time to recover funding if needed,” Chancellor Garrey Carruthers wrote in a recent memo to the university community.
NMSU spokesman Justin Bannister said the university’s previous estimated shortfall of $12.1 million in the current fiscal year included a $1.5 million cushion in anticipation of possible additional state funding cuts. Carruthers’ memo states that NMSU will also “develop a plan to conserve operating funds.”
“Beyond that, we are watching the situation and will respond the way we need,” Bannister said.
The state already cut higher-education funding by 2 percent earlier this year. The University of New Mexico and many other public colleges raised tuition to help cover their shortfalls. NMSU’s Board of Regents rejected a tuition increase, with Student Regent Amanda López Askin calling that action “a very deliberate breaking of a cycle.”
Instead, due to the reduced state funding and falling student enrollment, NMSU has been cutting. Thus far that has included eliminating at least 120 filled and vacant positions and reducing some employee benefits including on-campus employee health services. Carruthers and many other high-ranking university employees have taken pay cuts. The university plans to stop funding the equestrian team next year and is considering cutting its Surveying Engineering academic program.
All colleges and administrative divisions have already been required to reduce their budgets by between 5 and 6.2 percent this year, NMSU says.
A recent analysis by the national news organization ProPublica found that tuition and student fees at NMSU haven’t spiked as much since 2000 as they have at other public colleges in New Mexico and some surrounding states. But additional cuts might put pressure on regents at NMSU and other schools to once again consider raising tuition and fees.
‘There has to be a better way’
New Mexico’s budget woes are largely due to plummeting oil and gas revenues. That has sparked new discussions about how to diversify the state’s economy. Some worry that cutting higher education funding further could harm those efforts.
State Rep. Bill McCamley, D-Las Cruces, whose district includes NMSU, is among them. In an interview, he highlighted programs at NMSU that can help attract new jobs to the state and equip New Mexico’s young people to do those jobs.
For example, NMSU’s aeronautical engineering program prepares students to work in jobs related to Spaceport America and the new industry the state is trying to build in Southern New Mexico. Doña Ana Community College has just started teaching courses at the industrial park in Santa Teresa, arguably the state’s largest economic development project, which are aimed at improving workers’ technical skills related to jobs there. And degrees in computer science are key to helping New Mexicans land jobs with companies like Facebook, which is considering building a data center in Los Lunas.
“This is an absolutely vital component to future job creation,” McCamley said. “So if we’re just going to slash and burn, and that includes cutting NMSU’s budget, we are hamstringing our ability to create a long-term economy that helps us get out of this mess.”
McCamley said he won’t vote for a state budget that makes cuts without increasing revenues through “things like getting rid of the capital gains tax break, which has created zero jobs and gives away $50 million a year.”
He also wants lawmakers to consider legalizing marijuana to increase revenue. He’s sponsored legislation to do that in the past, but it hasn’t passed.
Cervantes said shifting the burden of funding government away from the state and onto lower-level agencies — like cities, counties, and universities — has been a consistent trend during Martinez’s tenure. In 2013, a Martinez-supported bill that passed with bipartisan support essentially shifted tax burden from corporations to cities and counties.
In response to the reductions in state funding that resulted from that tax bill, Las Cruces, Doña Ana County and many other local governments across New Mexico have raised gross receipts taxes.
“State government gets to take the political position that they didn’t raise any revenue, but they continue to force that obligation on to cities, counties, and students,” Cervantes said. “In the end the taxpayer still gets the bill, but Santa Fe gets to wash its hands — and that’s really what this is all about.”
Cervantes said he advocates for restructuring the state’s tax policies “from the ground up — but that’s an ambitious undertaking that we’ve not seen from the current administration.” Good tax policy, he said, should spread tax burden “thinly across a broad and diverse group of sources.”
In contrast, Cervantes called New Mexico’s tax and funding cuts, which he said have forced local tax hikes and tuition increases, “the opposite of a good fiscal policy.”
“We’re putting more and more of the burden of state government on fewer people in a smaller group,” he said.
McCamley said the consequences of such actions are significant.
“These cuts basically continue a downward spiral for the state,” McCamley said. “There has to be a better way.”