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Is This The 'Rainy Day' That New Mexico Has Been Saving For?

Mountain Mail of Socorro, New Mexico

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There is no doubt that the State's budget shortfall of nearly $600 million is a big, big pror lem. I am sure that our legislators might even say that is an understatement. They have been wrestling with it for weeks.

So it not surprising that someone would suggest that the State's "rainy-day" funds, that is the Land Grant PermanentFundand the Severance Tax Permanent Fund, could come to the rescue. Money would not be taken out of these funds, but Senator Majority Leader Michael Sanchez, (D-Belen) proposes that they would be used as collateral for the issuing of $500 million in bonds.

Assuming that this might be legal, future budgets would then have to include repayments with interest. This would add to the problem and pass it on.

If we don't reduce our budget spending now we will hand to future legislators an even bigger problem. All indicators are that there will be sizable federal taxes, putting even greater strain on our economy in the future. Now is the time to cut spending and reduce the size of state government.

The Governor has suggested a "temporary" increase in the gross receipts tax. We pay this tax every time we, buy something and when we "receive a service. \es, that adds to our cost of health care. This would further burden business in New Mexico even more. What we need is a "temporary" decrease in the number of state employees. We do not have to fill all the vacancies when they come up. We need to challenge the assumption that this bloated budget problem constitutes a "rainy-day" situation. Haiti is suffering a "rainy-day" situation.

That earthquake was not the result of anything they had done. There was no way they could have avoided it. It is a real emergency. Our situation here is man-made. And it can be solved by tightening our belt and going without some things for a while.

Maybe the RailRunner could be put on the side track for ten years. By then the population growth might make it more feasible. After all we are not on the main line between Washhgton and Boston. There are some things that contributed to our financial problems that we in New

Mexico did not cause.

But we did impose punitive regulations on gas and oil drilling that caused these companies and jobs to go out of state. We lost jobs and reduced our tax revenues. If we impose emission caps on our power plants and automobiles we will further burden our economy.

Green power is more costly and we will all pay for it in increased utility bills and taxes. When the state gives an incentive for someone to put solar panels on their house all the tax payers pay for that. We all hope that some day the cost will come down, but it is not here yet. The New Mexico Solar Energy Association reports the cost of "Photovoltaics (home solar electricity): 19-25 cents/kwh - twice to three time the cost of grid power." At this time we cannot afford the luxury of subsidizing green power. It is taking too much green out of our pockets. The time is coming when green power will be more affordable.

The governor needs to get serious about the problem. He offers to consolidate agencies to save $6.79 million and spends many times that on the motion picture industry. The best "rainy-day" solution is to tighten our belts, reduce spending and eliminate gross receipts taxes on medical care and service businesses. Don't touch our "rainy-day" funds.

Doug May is a retired Lutheran pastor and his views do not neces-sairly represent those of the Mountain Mail



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Original Publication Date: February 4, 2010



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