Martinez Budget: 3% Cut Overall, Decreases in Auditor Funding, Film Tax Rebate, More

Republican Governor Susana Martinez today released her proposal for New Mexico's budget. (Click for a PDF of the 146-page document.) Of course I haven't had a chance to read it all, let alone digest it, but we do know that her proposal includes about a 3% cut overall according to the AP, and would spend about $5.4 billion to finance public schools, higher education and general government operations. It calls for spending cuts of $179 million. No employee furloughs are included. There's a 20% cut in exempt positions in government, or about $6 million.

In other areas, the Martinez budget proposes a 20% cut ($3 million) in the Public Education Department’s General Fund operating budget, saying that can be achieved by cutting bureaucracy, not classroom spending. There's $10 million more for Medicaid to replace federal stimulus funds, a 5.2% decrease in general higher education funding and $1.9 million cut out of the higher education operating budget.

The Martinez plan does not propose any tax increases, per se, but does require that state workers (except K-12 teachers and aides) kick in an additional 2% of their salaries for their pensions, while the state cuts its pension contributions by the same amount. Martinez claims that will save about $39 million next year. Public employees and teachers are already contributing about 1.5% more to their pensions thanks to the budget crafted in 2009. That reduction was supposed to be temporary, but it continues this year under Martinez's plan. 

State Auditor Budget Cut
In a move that's the exact opposite of what Martinez promised during the campaign, she's proposing a  8.8% decrease in the State Auditor's budget, according to the Democratic Party of New Mexico. In campaign mode, Martinez said:

“We must give the State Auditor as many resources as necessary to do an effective job,” Martinez is quoted as saying. “We should know where every penny of taxpayer money is spent. It is inexcusable that any government agency or organization goes unaudited and their expenditures unaccounted for. Properly accounting for expenditures should be a requirement for receiving additional appropriations.” [Denish, Martinez support more funding for state auditor, New Mexico Independent, Trip Jennings, 8/24/10]

That was then, this is now. The self-anointed heroine of government transparency and accountability apparently believes the Auditor's Office can manage with even less funding than it had in past, now that her administration is in control.

Auditor Hector Balderas has repeatedly called for more resources to do his job, while having to instead endure cuts greater than those for other agencies. In March of 2009, his agency's general fund was cut by 14%, with an additional 4% cut made during that year's special session of the legislature. As Balderas said that year, "In these tough economic times, it’s critical that every effort is made to protect New Mexico taxpayer dollars from financial fraud, waste, and abuse." 

This year, the operating budget for the agency is about $3 million and Balderas’ staff numbers under 30 people. Of those 17 or 18 are auditors, he said in an interview with the New Mexico Independent after Martinez and Dem gubernatorial candidate Diane Denish had agreed during a debate that every public school should be audited. Obviously that would take more staff and more funding. At that time, Balderas commented:

“Everybody publicly supports the concept of auditing,” Balderas said, noting that his agency has been cut more severely than the rest of state government. The cost-saving measures come at a time when his office has attempted to strengthen the oversight his office provides.

“We’ve been aggressive about informing the public, the media and the government of the great risks that are posed by not having more robust, aggressive oversight,” Balderas said.

Now, Gov. Martinez apparently is singing a different tune on the importance of auditing every school district given her push to cut already inadequate funding for the State Auditor. 

Film Industry Rebate Cut
As the Los Angeles Times reports, Gov. Martinez is also calling for a big cut in the film tax rebate program, proposing to reduce the credit from a 25% to 15%. Is this a wise recommendation when New Mexico is already squeezed for jobs? Advocates for the rebate program think not:

Supporters said the cut would effectively take New Mexico out of the running for Hollywood productions because its credit would be lower than what most other states now offer.

"Any kind of reduction, and particularly a 10% reduction, says New Mexico is now closed for business,'' said Dana Arnold, partner for Albuquerque Studios, which is scheduled to host the Marvel Studios superhero movie "The Avengers" in April. "In these tough economic times, we need to do everything we can to foster job creation, and a reduction in the film incentive program is not the solution to continued job creation."