New Mexico's government will not be flattened by the oil crash and virus pandemic, rather it will limp along for the next year leaning on its ample cash reserves and moving to what the Legislative Finance Committee calls "moderately austere" budgeting.

The bottom lines are:

No employee layoffs or furloughs are planned, state workers and teachers will get a one or two percent pay raise instead of the planned four percent, most agencies will see their budgets cut two to four percent for the fiscal year that begins July 1 and there are no planned tax increases. The budget would go from the proposed $7.6 billion to about $7 billion. 

Key to the LFC and gubernatorial budget plans released in advance of the June 18 special legislative session is the use of $750 million in federal coronavirus money to help plug the $1.7 billion hole for the upcoming budget year. The feds have not expressly authorized that but the bean counters are going forward with the expectation that they will eventually give their approval.

There is a glimmer of good news. LFC economist Dawn Iglesias says the "upside risk" in the LFC predictions is the oil price going higher than the $31 a barrel she and her fellow bean counters expect it to average in the next year. West Texas oil has been trading in the high 30's in recent days. If that bid were to stick or tick higher predicted state revenues would rise.

If the economic torture continues everything will be on the table--cuts, tax hikes and layoffs--at the regular January legislative session when lawmakers tackle the budget for the fiscal year that begins July 1, 2021.

CHANGING GUARDS

We sat in on the virtual LFC pre-special session meeting Wednesday and witnessed a bit of situational irony. Senate Finance Committee Chairman John Arthur Smith, the most powerful budget voice for a decade but defeated in his bid for re-election at the June 2 primary, was unable to make a connection for most of the meeting. Instead it was presided over by House Appropriations Committee Chairwoman Patricia Lundstrom. The changing of the guard got an early start.

MLG'S HAND

Gov. Lujan Grisham has played a competent budget hand. She managed an oil-financed increase in a budget that had been stagnant for years. Yet she did not fight the conservatives desire for extraordinary budget reserves. Much of her budget will survive. Her revised smaller plan is not at great variance with that of the LFC. She and the legislature have breathing room for a year. They will need it. Things could get worse before they get better.

LOCAL HIT

Meantime, local governments like the city of Santa Fe and others are falling off the fiscal cliff, eating through reserves and furloughing or laying off employees. That crisis awaits another coronavirus package from Congress that would provide bailout money. Also, expect them to come to the state with hat in hand.

OPEN SCHOOLS

A recurring theme from lawmakers across the state and both parties during that LFC meeting was the need to open up the public schools in August. It was a clear signal to the Governor and health department as they near a final decision.

MEMO TO MANNY 

The email brings a memo:

Dear BernCo Sheriff Manny Gonzales, In case you haven't heard , Attorney General Hector Balderas is proposing that all law enforcement in New Mexico be equipped with body cameras, something you have long opposed. Your stubbornness has led to a variety of scornful commentary and now, after George Floyd and other shocking police abuse cases, your decision is completely out of context. So here's the deal: you cave on the cameras and you get to continue your longshot 2021 mayoral campaign. No cameras? Then no campaign. Done. Over. Finished. Have a nice day, Manny.

Meanwhile, ABQ Mayor Keller and APD Chief Geier know the ongoing excessive overtime pay fiasco at APD makes Keller vulnerable to mismanagement accusations by Manny or anyone else running against him. The department has come with a new overtime policy. Will it stop an officer from making nearly $200,000 a year as has already happened under Keller?

In light of police abuse that sparked protests here and nationally, City Council President Pat Davis is conducting a community survey on what should be the next steps for APD. It's posted here.

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(c)NM POLITICS WITH JOE MONAHAN 2020