It may not be so bad after all, even if New Mexico doesn't get a federal budget bailout.

That's the word on the developing budget crisis as top officials scurry to keep intact as much as possible of that $7.6 billion state budget adopted by the Legislature and which takes effect July 1.

It's a tall order given the collapse in state revenues caused by the corona shutdown and the crash in oil prices, causing a budget shortfall that could climb to over $1.5 billion.

Alligators along the Potomac still believe the state will get some bailout money but say the building blocks are already there for New Mexico to avoid disaster without that money and talks have begin to do just that. Among those building blocks:

--School districts are getting $100 million in federal coronavirus funding. That means the state could pull back that same amount from its school budget and place it in the general fund reserves.

--The state coronavirus funding under the federal CARES act already approved is $1.25 billion and the belief is that about $700 million of that could be employed to fill gaps in the 2021 budget. 

--State reserves are at about $1.9 billion and the state could safely utilize $700 million of it to fill the budget hole.

These moves alone amount to raising $1.5 billion and with no slashing and burning of programs or employees and even keeping a one percent pay raises for teachers and workers, down from the planned 4 percent.

This solution depends on getting creative with the CARES money already here for COVID-19 related expenses but the insiders don't believe that's a stretch.

When all is said and done the idea would be to have about a 3 percent increase in the budget instead of the 7.5 percent boost currently on the books. That would take the budget down to around $7.3 billion.

Importantly state reserves for the 2021 fiscal year would come in at about 14 percent. The state has been carrying a reserve of 25 percent.

And what should NM do if it does get a big dose of federal bailout money? There will be many ideas. One of them from the DC crowd would be to insure the state has enough proper medical equipment (PPE) for the continuing battle against the virus.

The bottom line is that the austerity hawks are not destined to carry the day. The doves are doing their due diligence and the flight of the hawks may be slowed. In fact, initial reports are that some hawks
look favorably upon the approach outlined here. Most important, state government now appears to have a decent shot at not exacerbating the enormous economic and social damage already inflicted and avoid indiscriminate budget cutting and austerity.

THE VIRTUAL SESSION

Now about that special legislative session to deal with the budget crisis and that MLG says she will call for mid-June.

The Governor wants an all virtual session--no lawmakers gathering at the Roundhouse for fear the virus could take hold. She won't get her way with the senate whose leadership has already parted ways with her. But the House led by Rep. Brian Egolf is set to go along. To do it the law must be changed to allow a virtual meeting. To do that the lawmakers have to meet in person. So. . .

The plan is for the legislature to begin a special session by having the 70 House members enter the chamber one at a time to establish a quorum. The bill to allow a virtual session would then be introduced to the Rules Committee which would meet on the large House floor and utilize social distancing. They would debate the bill, pass it and then send it to the full House. Members would again come into the chamber one at a time to vote. The Dems are assured of passing it because of their big majority.

The plan from Dem leadership is to resume the special session after approval of the virtual session measure. Lawmakers could attend the session from their Roundhouse computers, a hotel, an office or their homes--wherever they choose.

On another note, the bill allowing the virtual sessions would apply only in the rare event when a public health order is in effect. The intent is not to make virtual sessions the new normal.

It's a bit complicated and with a number of senators in their 70s and 80's--the group most vulnerable to the virus--meeting in person seems out of sorts. But the sooner they settle it the less damage they do to themselves. The public doesn't really care how they meet--just that they meet and do their job which is to fix the fiscal crisis.

MLG could help herself by finally setting a definite date for the session, listing the major issues she will put on the call and putting a halt to the bickering and backbiting over the special.