Saturday, October 17, 2009

Governor proposes1.5% cut in education spending

5pm - Update: Both the House and Senate have adjourned until Sunday afternoon -- only two hours after the governor delivered his proclamation. Members have returned to caucus meetings.

After being postponed until 2pm, the special session started even later on Saturday at 3pm, and as promised it was high drama on the Senate floor as lawmakers begin to consider ideas to whittle down the state"s $660 million dollar budget deficit in 2010 -- and fix the $200 million gap in 2009.

Senators debated what is germane and even considered calling an extraordinary session, so they could operate outside Governor Bill Richardson's proclamation for the session, which, for one, won't allow them to impose any new taxes to help raise money to offset the revenue shortfalls -- unless as Sen. Majority Leader Michael Sanchez suggested they operate outside the state's constitution and igonore the governor's call.

Meanwhile, Richardson has backed off his call to spare education from any cuts.

Richardson spent the day laying out his plan to lawmakers and stressing his priorities of saving jobs and making sure education is not harmed by major cuts.

The governor said he while he's willing to cut education by 1.5% those cuts must include safeguards that classrooms, kids and teachers will not be affected.

It appears the governor is hoping to use federal stimulus money to prevent further cuts to education.

“I have made adjustments to my original budget proposal to reflect our new budget realities. But just like my original plan, this is a fiscally responsible package with minimum cuts to services and one that avoids layoffs and furloughs,” Richardson said. “I have made it very clear to legislators that any cuts to education must be minimal and not affect our classrooms, kids and teachers.”

“We are able to minimize education cuts and protect classroom spending as a result of our aggressive efforts in the past to keep cash reserves at 10 percent or higher,” Richardson said. The Governor’s $617 million plan relies partially on those rainy-day reserves to protect schools, while still keeping future cash reserves at a prudent 5.5 percent.

The governor also wants to divert available short-term bonding proceeds from future capital projects to reimburse general fund for existing capital expenditures, and deauthorize stalled capital outlay projects; canceling the governor’s projects as well as those of lawmakers.

If needed he said he'll delay general fund increases to retirement and Retiree Health Care Authority funds and sweep state account of unspent money.

Richardson also reiterated today that tax increases will not be considered during the special session, something he and legislative leaders had already agreed to. However, he said that he will consider a tax package in the upcoming regular session in January

“It would be irresponsible to rush into any revisions to the state’s tax code and any changes now would have little effect on the current budget year,” Richardson said. “I will consider revenue enhancements during the January session as long as they have gone through a thorough review between now and then and can be proven to have a lasting positive effect on the budget.”

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