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Let’s Not Waste the Budget Crisis

By State Sen. Steve Fischmann

The January legislative session is fast approaching, and it’s time for both the governor and the Legislature to step up to the budget crisis.  Temporary federal aid, gauze and Band-Aids have gotten us this far, but the first-aid kit is now empty.  Projected general fund revenues for fiscal 2010 have declined over 25 percent (from $6.4 billion to $4.7 billion), with no sign of significant revenue growth in sight.  Little has been done to address the long-term structural problems we face.  The tough decision-making still lies ahead.

It’s no mystery how we got here: Big increases in state spending, $700 million in tax cuts since 2002 (largely to the highest income earners), “economic development” perks of dubious public benefit, and questionable deals made in a “pay-to-play” political culture.  All of this was financed by a bubble in natural gas severance tax revenue that is unlikely to return, and financial-market shenanigans that fueled a bloated economy.

Tired posturing about indispensable government programs or no new taxes will not solve our problems.  A combination of immediate measures and long-term policy shifts can.  Successful businesses use tough times to reinvent themselves.  That is exactly what New Mexico State government needs to do.  It’s painful, but it sure beats the alternative.  Let’s not waste this crisis.

Here are some ideas for moving forward this next legislative session.

Reducing Government Spending

It’s human nature to get sloppy about spending when there’s lots of money around.  The first step back to financial stability is controlling spending.  The governor has created a citizen panel to review potential tax increases; we should do the same to address potential budget cuts.

There has been much discussion about “across-the-board” cuts to “share the pain.”  This will only result in across-the-board mediocrity.  Large bureaucracies tend to create new programs to solve each newly identified problem.  Real solutions often lie in better delivery of core services rather than layers of new initiatives. Marginal and underfunded programs should be dropped as we refocus on more effective delivery of basic services.

Our public school classrooms are a perfect microcosm of this phenomenon.  Between overcooked federal and state testing mandates, documentation-heavy programs to help struggling students, and a bevy of “flavor-of-the-month” programs, it is widely acknowledged that teachers no longer have enough time to actually teach.  By streamlining and eliminating mandates while maintaining accountability, we can improve instruction and save money at the same time.

Policy adjustments can also significantly reduce spending.  It costs upward of $30,000 annually to house a prisoner in a state corrections institution.  Taxpayers are punished as much as criminals every time we send someone to jail.  Though we call them corrections institutions, the overwhelming evidence is that prisons are far more adept at teaching criminal behavior than correcting it.  Do we really benefit by sending non-violent first time offenders to jail?   Alternative forms of punishment not only save money, but promise fewer career criminals in our future.

Now might also be a good time to review the state procurement code.  Many complain that it often adds significantly to cost.  I don’t pretend to know one way or the other, but given the claimed level of waste, review and possible adjustment of the procurement code seems reasonable.

Restructuring Taxes

Legislators face many proposals for tax breaks for narrow interest groups every year.   Far too many are approved and never reviewed again.  More taxes are exempted in tax credits and deductions than is actually collected in state income and gross receipt taxes each year.  The result is a tax system where tax-break losers subsidize tax-break winners.

We do not need to raise tax rates to increase revenues.  We need only eliminate tax breaks that serve no broad public purpose.  Is it really appropriate that New Mexico auto sales excise taxes are only about half as much as gross receipt taxes on other products?  Other states don’t give this tax break.  Forty-eight states have implemented “consolidated reporting” policies to prevent national corporations from avoiding local state taxes through accounting tricks.  New Mexico has not.  Correcting just these two inequities would increase revenues an estimated $60 to $100 million annually.

Legislation that requires annual review of tax breaks, and that imposes sunset clauses on all narrow tax and economic incentives deserves our support.

Curtailing Pay-to-Play

The impact of pay-to-play is much bigger than the criminal violations we regularly see in the news.  Technically legal transactions that violate the public trust probably cost us far more than illegal activity.  Giveaway deals by the State Land Office, subsidies that give (not loan) hundreds of thousands of dollars to private speculators for every acre of private lots they create, and film incentives that give a cash rebate of $.25 for every dollar production companies spend in New Mexico will cost well over $100 million this year.  Total costs are much higher and are impossible to measure.

If we abhor pay-to-play as much as we let on, we should change the laws that encourage it.  Contractors working for the state, and companies seeking publicly funded subsidies or tax breaks should be prohibited from making political contributions.  There is no hope of curtailing corruption if we’re too faint-hearted to make it illegal.  Legislation that addresses these “ethics” issues may well save taxpayers more money over the long term than any other change we implement.

Steve Fischmann is State Senator for District 37 and a retired Fortune 500 corporate executive.

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On Pressuring Obama (and Heinrich)

By Jeanne Pahls

Lately we have received some criticism of demonstrations we have organized/discussed against Martin Heinrich and Barack Obama.  I’d like to suggest some food for thought on this.

We live in an empire, as all of us know.  Our new president has a past history of openness to many of our progressive issues, and is a president of empire.  He is a president of empire.  The best thing we can do for any elected official, especially one that tends to think in our direction, is to be out there shouting for what we think is right.  Hopefully we are not out there protesting decisions of the Republicans, but of the Democrats (or any elected official who is undecided or wrongly decided on an issue).  Do we think that the military-industrial complex or the Robber Class or any empire profiteer is not putting kubuku pressure on Barack Obama, Martin Heinrich, etc?

We need to be out there.  We need to be as present in every way as we were with W and his group.  We have a responsibility as citizens of this country who see the deaths in Palestine, the hungry kids in New Mexico, the destroyed families of Iraq, the unbelievable wealth of the military-industrial complex, to be persistent in our call for officials to do the right thing.  Our experience has been that elected officials are glad to be able to stand up for what we call for, and that they are willing to take courageous stands for these things IF WE ARE OUT THERE STANDING UP AND CALLING LOUDLY FOR THEM.

When President Obama began his inaugural address, these were among the first sentences he uttered:

“The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebears, and true to our founding documents. So it has been. So it must be with this generation of Americans.”

When I heard these words, I heard him calling on citizens of the U.S. to continue to pressure and call for what their ideals call for, as any good community organizer would.  Wouldn’t any elected official with any kind of integrity hope that their constituency would call for the best of actions on his or her part?  That would free him or her up to do the right thing, even if AIPAC or Lockheed was breathing down his neck.  Even if the Democratic Party was directing him to do otherwise.  Even if “political expediency” or “pragmatism” was directing him to do otherwise.

Please, as a peace movement, let us not make excuses for our political officials:  “He’s being politically expedient.”  “He’s being pragmatic.”  A wrong decision is a wrong decision and it is our duty as citizens of conscience to point it out, directly, honestly, loudly.  If some of us want to be on the inside listening to a speech, or inside the office meeting with the official instead of protesting, that is good.  These things are needed.

But for those of you who criticize us who organize a protest to call for the elected official (be he Obama or Heinrich or anyone else) to vote now with integrity, please consider:

Almost all the money in the world right now is on the side of swaying both political parties, and therefore your elected official, to do the wrong thing in terms of human needs vs the military industrial complex/robber class.

You and we and some other financially strapped organizations and financially strapped families worldwide are what is on the side of urging our officials to choose for human needs and healing instead.

We will be out on the streets loudly calling for what is right.  We will not “give the guy a chance and wait” – time is short in a bloodthirsty empire and we all have a responsibility here.  We offer no apologies for our demonstrations calling for integrity on the part of elected Democrats.  We offer no apologies for calling for elected officials to vote with integrity rather than “political expediency” or “pragmatism” or “at the direction of the Democratic Party.”  We invite you to join us.

Jeanne Pahls is Co-founder and Co-director of Stop the War Machine, based in Albuquerque.

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