New Mexico Gov. Bill Richardson has proposed a plan to reduce the state’s $441 million revenue shortfall for fiscal 2010 with the help of a total of $444 million in federal stimulus funds, bond proceeds, and spending cuts.
A special legislative session in October is expected consider how to close the budget gap in the $5.5 billion state budget for fiscal 2010. The governor presented the plan to an executive-legislative working group that he formed to develop solutions before the special session.
Richardson’s plan calls for using $91 million in federal stimulus money earmarked for fiscal 2011 to prevent cuts in public education this year, diverting $135 million in available short-term bonding capacity from future capital projects to operations, and saving $21 million by delaying increases to funds for retirees.
The proposal would also cut spending by $100 million with a 3% reduction for state agencies except education; cancel $60 million to $75 million of capital outlay expenditures; and take $40 million from state agency accounts, including $20 million from the college affordability fund that would be replaced later.
Richardson said his plan would close the deficit without cuts to education or tax hikes. It also maintains the state’s budget stabilization fund of $400 million, or about 8% of the general fund budget.
“This plan, which is based on current revenue projections, is meant to start the discussion to resolve this deficit,” he said. “I look forward to hearing additional ideas that legislative leaders may have.”
He said spending cuts of more than 3% would require furloughs and layoffs.