Monday, April 05, 2010

Budget deficit growing, more cuts or higher taxes in the offing.

Two weeks ago, Rep Janice Arnold-Jones told her Saturday morning discussion group, the state budget was accumulating a deficit, link.

This morning, the Journal corroborated her report. Arnold-Jones reported a $60M-$100M deficit, the Journal reports a projected $76M shortfall, link, for the current fiscal year (2010). The shortfall for fiscal year 2011 will be greater still.

Because there is no way to increase revenue in the current fiscal year which ends June 30, the shortfall will require spending part of the state's reserve fund. The fund, if projections are accurate (so far they have not been) will have $272M.

Gov Richardson and the Democrats plan to use even more of the reserve fund (up to $132M), and federal stimulus funds to make up the difference in the following fiscal year. At that point, the emergency fund would be effectively drained. And, if spending the reserve and stimulus funds don't make up for revenue shortfalls, additional program cuts, including education, are inevitable.

The Democrats in the Roundhouse own the problem. It was they, denying Republicans any opportunity for input, who decided how much money they would spend this year and next.

It was they for instance, who decided to keep Richardson's Rail Runner running, despite its $50M per year ongoing operational deficit.

They will try to keep all of this from coming to a head before elections in November, in order that they will not be held accountable by voters, for their reckless spending and wishful revenue projections.

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