Wednesday, November 17, 2010

Re: [MISP] Grass-roots groups pitch plans to balance state budget

Its interesting that the Rio Grande Foundation ( not a big fan of targeted tax incentives) proposes a cap rather than elimination. We were
the first State to have a practical rebate system despite the claims of other so its only right that we are the first to have an opportunity to
create version 2.0 ( or actually version 4.0 if you consider we went from 15% to 20% to 25% ). First the concept of caps is inherently wrong.
Your capping peoples ambitions and opportunities. But a rolling float where money not expended rolls into the next year and your first up
to receive your rebate should the float be exceeded is workable if there's exemptions for lower budget films or films that have high percentages
of real New Mexicans above and below the line. It also needs to be at a level that reflects our desire to continue to grow.
Similarly in today's political and economic climate I believe the no interest loan program has run its course. When it was implemented it
was an effort to kick start the business and boy did it work. However fewer picture companies who can make the requirements are interested
as the cost of money has declined. I believe we should raise the rates to whatever the State is issuing bonds for  (currently around 2.5%)
but eliminate some of the barriers. A redefinition of distribution to reflect the modern realities and the ability to pledge the rebate as part
of the collateral would clearly help local filmmakers. Loaning to a locally operated fund that could finance a slate and spread the risk would
be another idea
If we look at this as an opportunity for an enhancement for New Mexicans and a challenge to us all to work together
we will be fine. This is not the time to fall apart. BTW I'm proposing we raise the incentive % to 30% for pictures that
shoot outside of Santa Fe and Bernallio counties. But that's just me ever optimistic
 
ba480
 

Date: Wed, 17 Nov 2010 08:08:50 -0700
From: Robyn.Reede@STATE.NM.US
Subject: [MISP] Grass-roots groups pitch plans to balance state budget
To: MISP-L@LIST.UNM.EDU

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Just proposals being flaunted but scary nonetheless.

 

Grass-roots groups pitch plans to balance state budget

Groups from both sides offer advice on spending cuts

 

Steve Terrell | The New Mexican – 11/17/10

 

Two organizations — one conservative, one liberal — released lists Tuesday of proposals for Gov.-elect Susana Martinez and the next Legislature to fix the daunting $452 million budget deficit for next year.

The Rio Grande Foundation, a conservative/libertarian-leaning think tank based in Albuquerque, said the government could save more than $350 million by taking several specific steps, including:

  • Reducing the number of state employees by 4,000 positions, which would save about $20 million, the foundation said.
  • Raising state college tuition by more than 100 percent and closing some branch campuses of state universities. This would save an estimated $135 million, the foundation said.
  • Shutting down the Rail Runner Express commuter train. (The train's operating costs are paid for mainly by local taxes imposed by counties served by the Rail Runner and, to a much lesser extent, passenger fares — not general fund money. Both revenue sources have come in below projections. Last year, Gov. Bill Richardson juggled federal funds to make up for the gap.)
  • Capping the 25 percent film-industry tax-reimbursement subsidy at $30 million a year.
  • Taking hundreds of inmates convicted of drug possession out of prison and putting them on probation. If about half of those incarcerated for drug possession were released, the state would save about $13 million, the foundation said. Another $6.5 million could be saved by not jailing parole violators for technical violations. There were more than 400 such inmates in 2008.


The Rio Grande Foundation's proposals go along with Martinez's campaign promise not to raise taxes or cut K-12 education or Medicaid.

Meanwhile, a group called We Are New Mexico — which campaigned openly against Martinez in the recent election — announced it would soon be proposing specific ideas for the state budget. In a news release, the group said the state should consider such steps as:

  • Selling severance-tax bonds to avoid cutting state jobs. Senate Democratic Leader Michael Sanchez introduced a bill in this year's Legislature to issue $76 million in bonds to avoid job cuts. However, the measure never made it to the Senate floor.
  • Closing out-of-state corporate tax loopholes. (Martinez, during the campaign, said she was opposed to legislation to plug this loophole, equating it to increasing taxes.)
  • Reviewing "top-heavy administrative positions" as opposed to positions necessary to provide needed services.
  • Reviewing all tax incentives to see which are beneficial to the state and which are not.


Asked for comment on the two sets of proposals, a spokesman for Martinez's transition team didn't immediately endorse or reject any of the proposals.

Both Paul Gessing, executive director of the Rio Grande Foundation, and Bruce Wetherbee of We Are New Mexico said they didn't expect all their proposals to be adopted. Both stressed their main purpose was to start a conversation.

"Gov.-elect Martinez believes we must protect critical government services, such as classroom spending and basic health care for those most in need," Danny Diaz said in an e-mail. "She has been clear that raising taxes is not the answer. With the announcement of a nominee for secretary of the Department of Finance and Administration (Richard May), the Governor-elect's team is already hard at work assessing the situation."


Several state legislators interviewed Tuesday agreed that "everything is on the table" for budget cuts. But some expressed reluctance toward the proposals.

House Speaker Ben Luján, D-Nambé, said he and Rep. Luciano "Lucky" Varela, D-Santa Fe, have been discussing the possibility of eliminating most of the 3,000 state positions that are vacant. "I'm not sure where the other 1,000 jobs would come from," he said, referring to the Rio Grande Foundation's proposal to eliminate 4,000 jobs.

Luján said he would oppose drastic increases in college tuition. "We shouldn't make access to college more difficult to our children," he said. "If we do that, just a certain class of people would be able to go to college."

Gessing noted that the average tuition paid by students last year was $1,827 per student. The national average for state colleges and universities was $4,100. "Maybe they wouldn't do it all at once," he said. "They could (raise tuition) in steps to get it closer to the national average. Raising tuition to the national average would raise about $190 million," Gessing said.

Senate Republican Leader Stuart Ingle of Portales said he believes state colleges will have to raise tuition — or "cut a lot of people."

While he didn't know whether 4,000 state jobs should be cut, Ingle said he supports the basic idea of cutting some positions. "There are some entire agencies that ought to be cut," he said.

Sen. Phil Griego, D-San Jose, said the state government should start with consolidating various agencies. He also agreed that the state should seriously look at tax incentives and eliminate those that aren't productive for the state.

Ingle said film-industry incentives should be eliminated.

The Legislative Finance Committee reported this week that an analysis showed the state could lose $35 million in the next nine years if it continues to directly invest in firms such as film companies.

"Although the goal of the economic investments is to encourage expansion of certain industries, the LFC analysis further notes the benefits tend to go to private individuals," an article in the most recent Legislative Finance Committee newsletter says.

 

 

 

 
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