Fed uncertainty looms over state budget

SANTA FE (KRQE) - Across-the-board federal budget cuts with the potential to devastate the state budget are about to kick in with no sign of a deal in Washington.

The sequester will take hundreds of millions of dollars in funding out of the state budget.

When Congress approved the automatic cuts as part of an agreement with the White House to raise the debt ceiling last year, many assumed the cuts would be so damaging another deal on spending and taxes would be reached before the March 1 deadline.

Senate Finance Chair John Arthur Smith those automatic federal cuts practically eliminate the new money the state thought it had to spend in the budget now working its way through the Legislature.

"We're not able to backfill with state money every loss of federal money in the state," Smith, D-Deming, said.  "But we need to be prudent with our state dollars and backfill as best we can."

If the sequester goes through, the White House estimates 7,000 Department of Defense employees would be furloughed in New Mexico.

New Mexico military bases alone would see about $43 million worth of cuts.

The state would lose about $10 million in federal education dollars and funding for about 130 teaching jobs.

Those are direct impacts, but some economists estimate the state would lose 28,000 jobs in total over two years because of the cuts.

"This is a federal issue that they have got to fix and stop the gridlock," Gov. Susana Martinez said.  "It's not about politics.  It's about making sure people have jobs to go to and that we're not killing the economy in all of our states."

Both Martinez and Smith told KRQE News 13 the toughest part about this is uncertainty.

There's a possibility cuts will be delayed or altered by federal negotiations making a solid plan difficult if not impossible.

If Congress and the president don't find some way to fix the problem, state lawmakers may have to come back in special session to deal with the New Mexico impact.