With revenue forecast ‘on track,’ furloughs not needed, economist says

The state employee furloughs Gov. Susana Martinez has said could begin as soon as this week aren’t necessary, a New Mexico State University economist says.

Susana Martinez

Heath Haussamen / NMPolitics.net

Gov. Susana Martinez

That’s because a revenue forecast released Friday by the Legislative Finance Committee projects that “revenues continue to appear on track or exceed expectations from the December forecast,” The Santa Fe New Mexican is reporting. The new report projects the state ending the current fiscal year on June 30 in the black and at $54 million above expectations.

“The data is the data and it’s tracking pretty well,” Jim Peach, an NMSU economics professor, was quoted by the newspaper as saying. “We’re right on track, and there’s no need for furloughs or hiring freezes or anything like extraordinary measures for [fiscal year 2017].”

The governor’s office responded that the new report didn’t factor in the depletion of state bank accounts.

“We need to address this as soon as possible or we’ll be forced into a government shutdown, reducing hours at or closing MVD offices, parks and museums,” Michael Lonergan, a spokesman for Martinez, was quoted as saying. “In the meantime, the administration is taking steps to reduce the impact through a hiring freeze and developing furlough plans. We’re hopeful we won’t have to resort to that, but we need to be prepared.”

Martinez has already implemented a partial hiring freeze because the state is projected to finish the fiscal year with little cash on hand. Her administration has said estimates could change and it’s not comfortable with how close the state is to not being able to write checks.

But with the improved forecast, the estimates appear to be heading in the opposite direction.

Regardless, the governor recently directed cabinet secretaries to prep for furloughs that could begin as soon as this week.

The debate about the current, 2017 fiscal year budget is one of two currently playing out. The other, over the 2018 fiscal year budget that begins July 1, has descended into a war. Martinez has vetoed all spending for higher education, the Legislature and some other agencies in the 2018 budget. The Legislative Council asked the N.M. Supreme Court on Friday to invalidate some of those vetoes and reinstate funding.

The vetoes have put the state’s colleges and universities in the difficult position of not being able to plan for the fiscal year that begins in a few weeks — and come at a time when high-school seniors are deciding whether to attend college in state or out of state. Several university presidents and student body presidents from around the state have spoken out against the veto. State agencies, including colleges and universities, are required to submit preliminary budgets for the next fiscal year in early May.

In addition to the lawsuit, the Legislative Council has directed staff to try to gather the signatures needed for the Legislature to call itself into an extraordinary session — which would require bipartisan support in the House and Senate. Such an effort has been successful only once in the state’s history.

Martinez, meanwhile, says she plans to call a special session to address the situation, but she’s not set a date and says she wants a deal in place first.

Thus far, House Democrats have held the line against considering additional cuts. Martinez has said she expects to fund the agencies she vetoed as long as doing so doesn’t involve tax increases.

No deal is in place, and it’s not even clear that policymakers are having serious talks.

Some Democratic leaders have accused the governor of exacerbating the 2017 crisis with talks of furloughs as a negotiating tactic in the battle over the 2018 budget.

House Speaker Brian Egolf, D-Santa Fe, was quoted recently by the Albuquerque Journal as saying furloughs would be politically motivated. “There’s no need to do it,” he said. And Senate Majority Leader Peter Wirth, D-Santa Fe, was quoted as saying it appeared Martinez was trying “to make the crisis bigger than it already is.”

Meanwhile, Martinez last week continued her tour of the state to discuss the situation. You can watch her news conference in Taos here:

This BBSNews article was syndicated from NMPolitics.net, and written by Heath Haussamen, NMPolitics.net. Read the original article here.