Telling the truth about budgets
Susana Martinez continues to consistently claim that state government has grown by 50 percent (sometimes she says 54 percent) during the last 7.5 years. Her allegation about state government is simply not true, and it’s not even close.
Oh, it could be twisted into being kinda true, if you ignore things like inflation and population growth, and you cherry pick the years you want to use. Of course, if you ignore inflation and population, Susana grew her own piece of government by 70 percent in the same time frame — 16 percent more than she alleges the state grew. Is that what she means?
She flat out says, over and over, that New Mexico government has grown by 50 percent or 54 percent, using the present tense. She said it twice in the education debate, and has said it for months. The lie is making its way around GOP letters to the editor, indicating that both Susana and the party are trying very hard to repeat it enough that they hope no one will challenge it. The Republican Party has even included it in press releases.
Since Susana has a tendency to deny that she ever made a claim when she’s challenged on it, here’s video evidence: Go to 0:28 of this YouTube video of Susana praising Sarah Palin when Palin endorsed Susana in the Republican primary, here. The exact quote from Susana is that “Sarah Palin understands how New Mexico has grown government by over 50 percent and that is unacceptable.” She uses present tense, doesn’t qualify it, and is trying to trick New Mexicans into thinking that government is bigger than it was in the last Republican administration.
Just. Not. True. Here are the real statistics about state budgets, population growth and inflation. With sources and methodology.
The U.S. Census Bureau has made population estimates from 2003-2009, using July 1 each year – in sync with our fiscal years in New Mexico. During that time New Mexico grew from 1,867,909 to 2,009,671, a 7.589 percent population growth over six years (1.265 percent annually). U.S. Census data for 2009 is here. Census numbers for 2000-2008 (including, obviously, July 1, 2003), can be found here.
We’ll have 2010 census data hopefully by the end of the year, but to measure population growth during the eight fiscal years of the current administration, we’ll have to extrapolate through the end of this fiscal year. No one thinks we’re shrinking, so in the absence of hard data, assume the same annual growth rate of 1.265 percent. That means an estimate of 2,060,832 by the end of this fiscal year. If someone has a better estimate, I’d be happy to hear it, but absent that, this seems pretty fair. That’s a 10.328 percent population growth in these eight fiscal years.
If you take self-proclaimed libertarian, anti-government growth Republican Gary Johnson’s last fiscal year (FY ’03) budget of $3.897 billion and factor in CPI (see below), it is $4.736 billion today (for those who want to do the math themselves, take $3.897 and multiply by 1.019 for the first year, then multiply that number by 1.033, and so on).
The most common measure for inflation is the Bureau of Labor Statistics’ Consumer Price Index-Urban (often used even in relatively rural states). For reasons described below, this understates the real increase in government costs, but let’s be conservative and use this lower CPI-U number.
The below numbers are on a calendar year basis, so the eight year period of Jan. 1, 2003 to Jan. 1, 2011 doesn’t quite match our fiscal years. But fortuitously, the 2003 inflation rate and the current rate for 2010 (through June) are within a tenth of a point of each other, so it seems fair to use that number for the remainder of the administration. Again, if someone has better numbers for inflation or something more up-to-date than the end of June 2010, by all means say so.
Here is the link for annual inflation for the last eight years, from the Department of Labor’s Bureau of Labor Statistics CPI Detailed Report of June 2010 (see Table 26 at page 81). For those sane people who don’t feel like perusing the entire document, here are the annual inflation rates:
- 2003: 1.9 percent
- 2004: 3.3 percent
- 2005: 3.4 percent
- 2006: 2.5 percent
- 2007: 4.1 percent
- 2008: 0.1 percent
- 2009: 2.7 percent
- 2010: 1.8 percent (through June, annualized number)
Then simply account for the above-detailed population growth of 10.328 percent (multiply $4.736 by 1.10328), and the much longed-for lean, mean Johnson Republican machine budget, accounting for inflation and population, is $5.225 billion today.
How does that compare to our “big spending” budget today? Republican Johnson’s budget is actually BIGGER. The state’s FY ’11 budget was $5.343 billion. See page 6 of the appropriations section of the Legislative Finance Committee’s 2010 highlights here. The most recent $150 million in cuts puts it right around $5.193 billion — LOWER than the Johnson administration. Yes, accounting for simple inflation and population, the last budget of this administration is smaller than the last Republican budget.
What about the feds?
Heath deserves praise for raising an issue that the next governor and Legislature will have to grapple with: federal help for the state. The feds are adding several hundred million dollars to keep the state going in FY ’11, so if those dollars are included, state expenditures were closer to $5.604 billion (according to Heath’s research from the LFC) before the most recent $150 million in cuts. Heath’s column is here.
After the cuts, even including all federal spending replacing state spending, total state expenditures are $5.454 billion. That’s 4.283 percent higher than Johnson’s last year, or almost exactly half a percent growth per year — even counting Heath’s full federal numbers.
I’ve been very conservative in my assumptions, and generous to Republicans Susana and Gary, in one important way: I used CPI for inflation, even though it’s not a big secret that medical inflation is far higher than regular CPI. Since a big chunk of the state budget is devoted to health care (think coverage for poor children, high-risk people, and small businesses), if we’d adjusted the FY ’03 budget for the real increase in costs associated with state expenditures, Gary’s budget would almost certainly have been larger than the FY ’11 budget even with federal dollars counted. Several experts at a recent LFC meeting estimated medical inflation to have been roughly 9 percent over the last few years — three to five times higher than CPI most years.
Since parsing out medical inflation and applying it to those parts of the budget going to health care is something requiring a lot more time, health expertise and accounting analysis than most anyone has, I’ll stick with the more conservative estimate of inflation and call the FY ’03 and FY ’11 budgets roughly a draw. But more thorough inflation analysis would show state government smaller today than at the end of the last Republican administration.
Susana is saying state spending is out of control, when it’s virtually identical to — or lower than — the budget that ended 8 years of libertarian Republican leadership.
Whether you count federal help or not, and whether you use CPI-U for inflation or do a more detailed application of real cost increases, the state budget is either a fraction smaller now than under Gary Johnson or a fraction bigger. The margin is minuscule no matter what numbers you use.
And don’t blame the 90s legislature or state employees for the last Republican administration — Johnson not only had veto power that he used regularly, he had control over the entire executive personnel system, and for his last term, no unions.
So Susana’s big complaint and reason to elect another Republican administration is… a flat budget?
That whole story — that state government overall has stayed flat while Susana’s cushy slice of it grew — is not nearly enough to fire up Susana’s Republican base. In fact, quite the opposite — they’d be disappointed to know that the present administration, partly due to the ongoing national economic crisis, but also largely due to massive Democratic tax cuts, is as thrifty or thriftier than both an icon of the national libertarian movement and the current GOP gubernatorial nominee. To motivate those who want to believe that Republicans magically run a tighter ship of state, Susana and her political consultants have told and re-told the “50 percent” story to enrage voters and scapegoat state and educational employees.
Does she know?
Would it change Susana’s position if she knew that New Mexico was 49th in the country in teacher salaries at the beginning of the current administration, and bringing us into the 30s in that category accounted for hundreds of millions of dollars? Does she want to slash teacher salaries further (they’ve already been hit) and work our way back down to Mississippi pay levels? If so, say so. How does that square with recruiting, retaining and rewarding great teachers?
Or should we further decimate our prison staffing? How’s that working for Arizona, where murderers wire-clipped their way out of a cheap private prison on their way to kill again in Santa Rosa?
Who would really notice if the poorest kids in the state — many of whom live in Doña Ana County — were cut out of Medicaid? Right?
Does Susana even know that over 75 percent of our budget goes directly to K-12 education, higher ed, and Medicaid? Which of those will she cut? All of them? None? OK, Does she realize that the remaining 24 percent includes things like corrections, the judicial system, and law enforcement? The remaining 24 percent includes help for small businesses and high risk individuals’ health care? That it includes CYFD, which both helps vulnerable children and protects society from the kids who have turned violent?
Does she want to underfund our roads and leave our infrastructure to rot, as Republican Tim Pawlenty did for years in Minnesota, right here in New Mexico? These aren’t scare tactics, these are real consequences of politicians not understanding the important role government plays in keeping us safe.
All the cuts we’ve endured in the last few years have come at exactly the same time that our citizens are relying more than ever on state services. When jobs are scarce, more people than ever turn to our universities and community colleges for training. Unemployment lines are around the block. There are more poor kids losing private health insurance every week. Tough times, sadly, tend to put more demands on our police, judiciary, and correctional systems.
Demands for many state services are known as “counter-cyclical.” That is, when the economy goes down, the public’s need for help goes up. Susana’s and the Republican Party’s cold attempts to blame the effects of a national and worldwide recession on public servants are wrong.
Not ready for prime time
This isn’t an academic quibble. If Susana thinks we’re 50 percent bigger than under Gary, that means she thinks there’s 50 percent fat to cut to get back to Gary’s number. Problem is, we’re already there — or lower. Our next governor has to understand the budget, what’s in it, and where it can be tightened without jeopardizing public safety, health, education or infrastructure.
If Susana starts out misunderstanding the state budget by a billion or more dollars, that’s a real problem regardless of your party affiliation. Further, if Susana thinks that Dems raise taxes, she has the wrong state and the wrong party. This administration has slashed taxes well below the levels of Susana’s Republican Party, much to the disappointment of many education, health care and public safety advocates.
If Susana really thinks we’ve grown 50 percent or had a net increase in taxes, she doesn’t know much about New Mexico state budgets and isn’t ready for prime time. If she knows better but keeps up the deceit for political gain, well, shame on her for scapegoating teachers, corrections officers, nurses, police and the many other public servants who are doing more than ever with less than we’ve had in decades.
Maybe Susana really didn’t understand our budget, its size, and what it funds until now, but going forward, she can’t plead ignorance. She’s even free to have her own team of Texas Republican Swift-boat donors and political operatives check sources and methodology. Lord knows they have the money. It seems a bit wonkish but it’s all easily confirmed by a calculator and access to official websites and budgets.
State government is the same size as it was 8 years ago, period. In some key ways (specifically, number of state employees per capita) it’s actually significantly smaller. But if Susana and her Republican Party keep telling the 50 percent bloat fable, well, after their dissembling on vouchers, we’re going to have a bit of a pattern emerging.
Bundy is the political and legislative director for AFSCME in New Mexico. The opinions in his column are personal and do not necessarily reflect any official AFSCME position. You can learn more about him by clicking here. Contact him at email@example.com.
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