Governor and Legislature Must Change Course Fast to Fix the Budget Crisis, Put our Families First

Republished from the New Mexico Political Report. Also seen in the Albuquerque Journal and NM Politics.net

Kim-2015-09-23By Kim Posich, Executive Director of the New Mexico Center on Law and Poverty

New Mexico is in a budget crisis. Our state’s economy is in shambles. We have the worst employment rates in the country and revenue projections have dropped over $200 million dollars from just before the session and they could get even worse.

The result of this economic free fall will be continued under-funding of our schools, jobs, economic development and public safety efforts – all the things most important to New Mexicans. Time is running out at the state legislature. If lawmakers do not take clear aim at the challenges we face, New Mexico will strike out for our families and children.

Strike one will be the budget. Deep cuts are coming that will threaten jobs and public safety. Healthcare, driven by Medicaid, is one of the only growing job sectors in New Mexico yet Medicaid is short by over $60 million in the budget being considered by the legislature. If we cut Medicaid by $60 million, we lose over $140 million in federal matching dollars. The Human Services Department has been clear that there is no room to make cuts other than to reduce services and payments to healthcare providers.

Our schools are still grossly under-funded, shortchanging our children and hurting our prospects for attracting and keeping businesses in New Mexico. With the current budget, we cannot invest in our teachers, Pre-K programs and educational initiatives that have been proven to work in preparing children for academic success and graduation.

The budget also underfunds agencies important for public safety. The judicial branch is struggling with its caseload and the corrections department lacks needed staffing. Deep cuts are also in store for the state’s behavioral health system including crisis intervention services. These are all essential to the integrity of our justice and rehabilitation system and ensuring our communities are safe.

Strike two will be failing to raise revenues. There are sensible opportunities to increase revenues without raising taxes and harming our families. One such proposal is delaying recently passed corporate tax breaks for two years. New Mexico cannot afford them right now. Another opportunity is to increase distributions from our $15 billion permanent fund, to provide needed funds to our education system, including early childhood education.

There are also ways to rebalance our tax structure to make it less heavily reliant on working families. According to the Institute on Taxation and Economic Policy, the lowest income New Mexicans are paying a higher percentage of their income on overall taxes than the highest income households. We could modify capital gains deductions that do not benefit most New Mexicans. We could modify income brackets and actually lower taxes for working and middle class New Mexican families who are the vast majority of our residents.

New Mexico is also still sitting on over $1 billion in unused capital funds, as the state auditor’s office has discovered. These funds could be recouped to fill one-time shortfalls and our reserves, and yet little action has been taken by the Governor’s office to mobilize this funding.

Strike three will be public safety. The best antidote to crime is to have good paying jobs, a strong education system and healthy communities. Unfortunately, many of the so-called “tough on crime” bills being proposed in the legislature will be ineffective at reducing crime. If we are serious about our safety, then we must invest in our communities, behavioral health, law enforcement training and the justice system. Right now, our budget lacks in all these areas.

We need to make New Mexico safe. We need good paying jobs. And most importantly, we need a school system that will do right by our children. There is still time to make a turnaround. The Governor and Legislature should step up to the plate to raise revenues. We need our leaders to fund a state budget that addresses our economic crisis and the needs of everyday New Mexicans.

Medicaid Expansion Resulting in Job Growth and State Savings

BBER logoA new report finds that the Medicaid Expansion has significantly increased jobs and revenues in New Mexico, generating a surplus that covers the cost of expansion itself. The report by Dr. Lee Reynis, economist at University of New Mexico’s Bureau of Business and Economic Research, updates prior research from 2012 and details the economic and fiscal impact of Medicaid expansion.

Over 200,000 adults in New Mexico gained healthcare coverage through Medicaid when the program was expanded under the Affordable Care Act. The federal government is paying for the entire cost of Medicaid expansion until this year when the contribution gradually steps down to 90 percent by the year 2020, with the state responsible for paying the 10 percent remainder of costs. The federal share totals over $11 billion between 2014 to 2021.

The report finds that the additional economic activity associated with the influx of federal dollars from Medicaid Expansion generates significant revenues from insurance premium taxes, gross receipts taxes, and income taxes as well as savings from programs no longer needed, including the State Coverage Insurance program. Additionally, the number of adults who are uninsured has dropped dramatically reducing uncompensated care costs for providers. From this activity, the State is expected to see a surplus of over $300 million dollars from Medicaid expansion between fiscal years 2014-2021.

Overall, the healthcare sector is leading job growth in New Mexico, adding over 1,500 new jobs in 2014 alone. Income and earnings have also risen for the healthcare workforce, with Medicaid accounting for 25% to 46% of the total increases in personal income in New Mexico. For a state historically underserved with healthcare providers, the Medicaid Expansion is providing funding to help grow our health care workforce and is encouraging investment in hospitals and treatment facilities with an emphasis on quality improvement.

News about the impact of Medicaid expansion comes at a time when New Mexico’s legislature is determining next year’s budget for Medicaid. Revenue forecasts have worsened due to dropping oil prices. Abuko D. Estrada, staff attorney for the New Mexico Center on Law and Poverty, says, “Medicaid is one of the best investments our state leaders can make. The program is paying for itself and is a boon for our economy, while providing quality health care coverage for New Mexicans in these tough times.”

Report-UNM BBER-Medicaid Economic and Fiscal Impacts-2016-02-03
Press Release-NMCLP-BBER Medicaid Expansion Report-2016-02-03
Learn more about the University of New Mexico’s Bureau of Business and Economic Research here.

Center files suit to block additional work requirements for SNAP recipients

SNAP LogoOn January 27, the Center filed suit against the New Mexico Human Services Department regarding the state’s imposition of additional work requirements for 17,500 struggling SNAP recipients.

The New Mexico Human Services Department recently implemented new SNAP eligibility requirements for childless adults ages 18 to 50. Effective on January 1, 2016, the new requirements limit individuals to just three months of SNAP assistance if they cannot find a job that offers 20 hours of work a week or a qualifying job training program, regardless of how hard they are looking for work or if applicable work training is even available. Read more about the importance of SNAP for New Mexico communities here. (link to Defeating Hunger project page).

The Center on Law and Poverty filed suit against the Department to oppose these requirements. Our complaint demonstrates how the state’s administration of the eligibility requirements and the harsh new time limit violate federal law. We are asking the federal court to enjoin the Human Services Department from proceeding with these requirements because they conflict with federal law, adults haven’t received proper notice about them, and workers haven’t been properly trained on the requirements.

You can read more about our lawsuit in the Albuquerque Journal and the Santa Fe New Mexican.