One week and one day prior to the beginning of the 2014 Legislative session, the House Appropriations and Finance Committee (HAFC) has begun its hearings to prepare for development of the FY 15 state budget. Senate Finance and the Education committees will begin meeting mid-week as legislators realize thirty days is hardly enough time to craft a $6+ billion dollar budget and deal with all of the financial issues of the State.
HAFC heard a revenue forecast that still features $293 million in new money for FY 15. However, future revenue projections were frankly underwhelming, which led both Rep. Lucky Varela (D-Santa Fe) and Department of Finance and Administration (DFA) Secretary Tom Clifford to caution the committee about setting recurring funding levels now that could negatively impact future budgets.
Quick fact: Each dollar in the price of a barrel of oil equates to about $6.5 million in the General Fund.
The committee heard the budget recommendations of both the DFA and the Legislative Finance Committee (LFC), and though the two took different paths in spending, both arrived at a balance of approximately $583 million for reserves of 9.7 percent.
A number of committee questions focused on the lottery scholarship fund and how to go about making it solvent. Both the LFC and DFA recommend covering the projected short-term shortfall to make scholarships whole this spring. Rep. James White (R-Albuquerque) questioned the LFC recommendation to also put recurring monies into the lottery scholarship fund, wondering “do we really want to throw taxpayer money into the lottery program? We can’t make higher education a benefit. No state can afford 22 years of education.”
Note: The LFC recommends lottery scholarship reforms, such as capping awards and raising the GPA from 2.5 to 2.75. Rep. Varela and Senate Finance Chair John Arthur Smith will be carrying that legislation.
Rep. Don Tripp (R-Socorro) questioned if lottery scholarship funds actually affected graduation rates. LFC Director David Abbey suggested they did not. (Those assumptions are up for debate.) And with regards to the higher education funding formula, Rep. Jimmie C. Hall (R-Albuquerque) suggested that it currently is changed every year just to suit some institution, so it should be made more permanent.
At the close of the morning hearing, LFC Director Abbey introduced UNM Professor Edl Schamiloglu, Electrical and Computer Engineering, who is an “administrator in training.” Schamiloglu will be interning with the LFC the next several weeks.
Senate Finance takes up the cause on Wednesday.