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Thank goodness for John Arthur Smith and his accolades, says John Arthur Smith, Chair of the Senate Finance Committee. Smith has held enormous power and he used it to very conservatively managed New Mexico’s approach to state budgets.
Our state budgets are built on last year’s budgets. Our legislative budget-makers then spend (or cut) on programs or services depending on revenue estimates. Called “incremental budgeting” this is the most common method of budgeting because it is simple and easy to understand, but it always favors the status quo and its biases. For example, criminal justice systemic biases produce outsized minority prison populations. The judge’s decision in the landmark Martinez/Yazzie v State of New Mexico educational equity case calls for an education budget based on what students’ needs are, period. Building a needs-based budget is an opportunity to eliminate or reduce the systemic racial and cultural biases of past budgets.
Meanwhile, writing in the newsletter of the Legislative Finance Committee, Smith proclaims “Without the … decision to create a large reserve to cover it, New Mexico might be in much worse shape going into economically precarious times.”
Never mind the need for such large reserves this year came in part because Smith killed progressive proposals to develop more diverse and reliable revenue sources. If proposed repeals of the rich person’s 2003 Personal Income Tax cuts and the big corporation’s 2013 Corporate Tax cuts had passed, we would not need such large reserves. Proposals to increase payouts from the Land Grant Permanent Fund for education purposes would also have reduced the need for reserves. The House approved those repeals and the Permanent Fund proposals, but Smith et.al. stopped them in the Senate.
Let us give Mr. Smith and other NM policymakers an “A” for having adequate reserves, and an “F“ for failing to provide NM with a stable, diverse revenue stream our people need.
Fortunately, Smith and his mostly male conservative senators, are being replaced with incoming progressives, mostly women who prioritize human needs. Let us hope the new Senate will seriously consider the revenue alternatives Smith et.al. stopped in favor of continued reliance on Oil and Gas revenues. As noted in a report issued October 19 by the Institute for Energy Economics and Financial Analysis, “… the oil and gas industry has directly provided a high percentage of New Mexico’s annual revenues… But the industry is in the midst of a long-term financial decline that transcends its usual boom-and-bust volatility. State policymakers must grapple with this new reality and develop a robust response to protect New Mexico’s fiscal health.“