Lawmakers: NM gov can use federal aid to ease cuts

New Mexico legislative budget leaders said that Gov. Bill Richardson can use federal economic stimulus money to soften the blow to administration agencies and state programs from budget cuts approved by the Legislature.

The Richardson administration has been warning that 7.6 percent spending cuts for most agencies under its control could force furloughs of state workers, reductions in health care and social services for the needy, and possibly lead to the early release of prison inmates.

The governor has until Nov. 12 to sign or veto the budget-cutting bill.

Leaders of the Legislative Finance Committee on Thursday said Richardson has flexibility to manage the cuts and has a pool of federal stimulus aid that could ease potential reductions in services.

"The governor does have that money squirreled away somewhere and that could be made available to offset some of these proposed cuts," said Rep. Luciano "Lucky" Varela, a Santa Fe Democrat and chairman of the Legislature's budget oversight committee.

Some administration programs, such as law enforcement in the Public Safety Department and public defenders, were subject to 2 percent cuts. Lawmakers also say Medicaid and services for the developmentally disabled were excluded from the 7.6 percent cuts.

However, Richardson contends that Medicaid is subject to reductions because of language used in budget bills.

The governor initially received $58 million in federal economic stimulus aid that could be spent at his discretion without the approval of lawmakers. During last week's special session, the Legislature earmarked $20 million of that to help plug a $650 million state revenue shortfall.

Gilbert Gallegos, a spokesman for Richardson, said the Legislature was attempting to improperly appropriate the $20 million.

He also said the governor had already pledged much of the federal stimulus money, including $22 million for local government projects, $10 million for solar electric systems in public schools, $4 million for the College of Santa Fe and nearly $9 million for other educational programs.

However, finance committee vice chairman Sen. John Arthur Smith, a Deming Democrat, said Richardson could redirect part of the federal money and tell local governments and others it's needed for state operations, such as prisons

The Legislature's deficit reduction bill calls for an aggregate 7.6 percent cut in spending by agencies under control of the governor to save $94 million.

The bill does not require a 7.6 percent cut for each executive branch agency, according to Varela. Instead, the governor can tailor cuts to each program and agency. The 7.6 percent applies to more than $1.2 billion budgeted for administration agencies, according to the finance committee.

The Children, Youth and Families Department and Aging and Long-Term Services Department issued statements Thursday warning of possible cuts in services, including child care assistance, programs for domestic violence victims and home care for the elderly.

The Corrections Department has said 660 inmates might be released early and two prisons closed if the agency must cut 7.6 percent from its budget.