Dwight T. Pitcaithley

I recently recorded a 30-second video for the Call on Me Now campaign. In it I join other citizens in urging the president to ask us to do more in rebuilding our country.

I hope the Call on Me Now spots will help spark a national dialogue about how much we’re willing to do as individuals for our country. Everyone seems to think Americans are selfish, and only interested in feathering their own nests. In my experience, that’s not true. We all want to contribute to our country. We can do a lot more than we’ve been asked to do so far.

Personal responsibility goes a long way in building community and country. In some instances progress can only be made collectively; in others individual action will move us where we need to go.

Given the present state of things, I believe we need to be personally more thoughtful and less angry. We need to be less influenced by political provocateurs and more responsible for developing our own political philosophy. We need to acknowledge the fact that personal and corporate greed has had a debilitating effect on this nation. We need to understand that our daily personal choices – in the cars we drive and the food we eat – have ramifications far beyond our homes and towns. We need to have a dispassionate conversation about climate change before thoughtful alternatives are beyond our reach.

We need to demand that our elected officials shed more light and less heat on the critical issues facing this nation. And we need to agree that we will solve those problems not by shouting at each other or drawing lines in the sand, but by objectively analyzing our options and coming to informed and sustainable decisions.

In my video I ask the president to “Call on me. I’ll do my part.” If you have a chance, I hope you look at it, and the other short videos on the Call on Me Now website. If you agree with what we’re saying, perhaps you could forward the videos to your friends.

Dwight T. Pitcaithley was born in Carlsbad and served in the U.S. Marine Corps from 1964 to 1967. He holds degrees from Eastern New Mexico University and Texas Tech University. In 1976 he entered the National Park Service, where he served as chief historian from 1995 to 2005. He lives with his wife and family in Las Cruces.

Steve Fischmann

Senate Bill 36 is a scheme to hijack funding for education, health care and public safety to finance public road improvements and infrastructure that benefits private development projects.

I just read the harmless-sounding Transportation Reinvestment Zone Act (Senate Bill 36) that is before the New Mexico State Legislature. Good transportation is important for economic development. Given that the bill has been endorsed by the Revenue and Tax Stabilization Committee, it has a real chance to pass.

But there is no glee here. I can only marvel at how development interests will use this vehicle to plunder funding for public services and simultaneously limit your civil rights.

At its core, SB 36 is a scheme to hijack funding for education, health care and public safety to finance public road improvements and infrastructure that benefits private development projects. In most cases, no legislative approval is required. Private developers are not required to contribute a penny.

Proponents claim the legislation is necessary to fund the expensive Paseo Del Norte overpass in Albuquerque, but this bill creates mechanisms that go far beyond that. It was rushed through the Senate Corporations Committee without allowing opposition testimony, and with a clause that will allow it to go into effect immediately, rather than in July.

The skids have been greased.

A democracy-free zone

SB 36 allows cities and counties to designate transportation reinvestment zones within their borders. These reinvestment zones become separate political entities to be governed by the local city council or county commission. Reinvestment zones are exempted from local ordinances, including planning and zoning.

If you live or own a business in one of these zones, you have limited opportunity to determine what laws are put in place. Rules that govern city and county operations are not in place to constrain how the governing board operates. You are in a democracy-free zone.

The reinvestment-zone board is given broad powers to launch infrastructure projects such as roads, drainage, sewers, and utility improvements. The legislation calls these projects “public,” but the intent is clearly to benefit specific private interests such as hotels and shopping centers that normally have to pay for their own street and sewer improvements.

Funding for reinvestment zone infrastructure projects would come from taking a cut of the gross receipts taxes collected in the reinvestment zone. The legislation blithely assumes that local police, fire, and other services will not be impacted by the set aside, or by the costs of supporting the new reinvestment-zone bureaucracy.

Even more alarming is the potential impact on the state treasury.  Unlimited sums of money could be redirected from core education, health care and public safety services to subsidizing infrastructure projects benefiting private businesses.

When state government resorts to such drastic measures as creating democracy-free transportation reinvestment zones, you would think there would be some sizable public benefit. Well, not really. Reinvestment-zone bonds are projected to be extraordinarily expensive. An equivalent 10-year, 4 percent revenue bond backed by $10 million in cash flow would support $14 million more in proceeds.

‘Economic development?’ Don’t fall for that one

And why would the Legislature ever vote for a measure that creates expensive financing, adds a layer of government bureaucracy, and limits civil rights? Because powerful supporters will shout “this measure creates jobs.” No politician in his right mind wants to be caught voting against jobs!

The reality is that proposals like SB 36 can eliminate more jobs than they create. Funds taken from public services result in reduced employment outside reinvestment zones. And many of the jobs in reinvestment zones would not be new. Developers that would have built anyway will simply use the law to beef up their bottom lines with your tax dollars.

We don’t have to turn democracy on its head to finance road and infrastructure projects, even for Paseo del Norte. Instead of hijacking funds from core government services, we should use the state road fund or special property-tax assessment districts that were designed for infrastructure financing.

If we do not have enough money in the road fund, then let’s be honest with voters and either raise the gas tax or forego the projects. Or better yet, develop a transparent and cost-effective funding mechanism that requires up front participation and accountability from private beneficiaries.

Don’t fall for complex tax and financing policies masquerading as job creating “economic development.” Reinvestment zones create the illusion of sound finance, but they are the sub-prime mortgages and credit default swaps of the public-financing world. After all the painful financial lessons we’ve learned recently, we’re too smart to invest in schemes like that. Aren’t we?

Steve Fischmann, a Democrat, represents the Las Cruces-area District 37 in the New Mexico Senate.

Pete Campos

New Mexico’s economy is improving, a little, and the result is that the state budget is growing, a little, for the first time in years. But this is not the time to go on a big spending spree.

Our economic recovery is still very fragile. We still have 46,000 fewer jobs in New Mexico than we had in February 2008, before the economy soured. We’ve only gained back 7,000 of the 53,000 jobs we’ve lost since our peak. Consumer sales appear strong, but probably because people are dipping into their savings to buy more, and not because they’ve gotten pay raises. And the price of natural gas, which fuels our state budget, is down from last year and at its lowest level since 2002.

So while the outlook is not as gloomy as it was, this is not the time to spend freely. It is the time to invest in education, infrastructure and local job-growth and business-expansion programs. Putting New Mexicans back to work is the best thing we can do to make lasting improvements to our economy. More jobs means more spending in local stores and less poverty all across the state — we still have one of the worst poverty rates in the nation — and that translates into more money into the state’s general fund and less demand for expensive state health care and other assistance programs.

The Legislature did a remarkably good job of balancing the state’s budget over the last several years with a combination of budget cuts and cost-savings measures, modest tax increases and prudent reliance on federal stimulus funds. Many worthy state programs suffered, which meant important services to New Mexicans were cut. But it could have been even worse.

A plan worth considering

Now that the economy is showing some signs of improvement, we can begin to restore those cuts and invest in long-term solutions. A multipoint plan is worth considering.

First, we can, and should, approve a multimillion-dollar public works package that will not only put New Mexicans back to work quickly but also help build our state’s lasting infrastructure. We’re on track to approve about $130 million in capital spending backed by severance taxes and another $299 million in a general-obligation bond package that will be submitted to voters this fall.

We must continue to work toward fully funding projects that are shovel-ready and appropriating the money necessary to clear the backlog of unfinished projects. We must pursue this effective strategy of completing unfinished projects. It is also important that higher education and government projects across New Mexico be funded. Smaller communities, like Watrous and Willard, deserve these projects, as do larger cities.

Second, we should approve targeted tax incentives to businesses that are willing to hire more New Mexicans, expand their businesses and invest in new equipment. Such tax incentives cost the state general fund, of course, so we should approve a modest package worth about $20 million, rather than some of the more expensive packages supported by others.

Third, our public education system must be strengthened so that expanding businesses continue to have a talented, skilled and motivated labor pool from which to draw workers. Linking our community college system employers from Raton to Deming would be one of the best investments we could make in the state. Our vocational education schools, which are uniquely suited to preparing New Mexicans to take jobs around the state, must have our strong support.

We must have a sound state budget

Approval of a sound state budget is the foundation for this entire plan. A budget for the fiscal year that begins July 1 that does not commit the state to spending more money than it can afford is critical to our economic recovery. We must continue to provide for basic services without growing government spending to an unsustainable level.

By setting aside politics, the Legislature and the governor can work together to meet the needs of the poor, improve education, assist small businesses and offer a hand to the most vulnerable and the elderly.

Campos is a Democratic state senator from Las Vegas and president of Luna Community College.

Senate Bill 9, sponsored by Peter Wirth, D-Santa Fe, now heads to the Senate Finance Committee. The legislation would reduce overall corporate income tax rates while closing a loophole that allows out-of-state corporations doing business in New Mexico to avoid paying state income taxes.

Clearly New Mexico’s Matt Reichbach liveblogged today’s hearing. Read the archive here:

The Roundhouse in Santa Fe (Photo by Heath Haussamen)

The current fuss over budget negotiations is a normal part of the process at the Roundhouse; lawmakers sound confident they’ll reach a deal.

The budget was moving through the House at about the usual speed until Monday afternoon, when Republicans on the House Appropriations and Finance Committee suddenly balked at what had been a tentative deal. As the AP reported, the stumbling point was a contingency plan that would have left some of Gov. Susana Martinez’s proposals unfunded if the state’s revenues aren’t as high as hoped.

Democrats said they were shocked and disappointed that their deal fell through; Republicans were forced to awkwardly backtrack. So what was behind all the sturm und drang?

The governor’s office apparently didn’t like the deal and asked committee members to put a stop to it.

“The governor is optimistic that we will be able to work together in a bipartisan way,” Martinez spokesman Scott Darnell explained in an e-mail, “…but does have some concerns over the putting other education-reform funding and money to keep nursing homes from closing in New Mexico in a contingency status.”

“Helping our seniors and investing in education reform are top priorities, as is ensuring that we are able to invest in tax reforms that make New Mexico more competitive so that we can create jobs,” Darnell said.

‘Pretty hard to figure out’

Still, the Republicans’ sudden move came as a surprise, said the chair of the House Appropriations and Finance Committee, Rep. Henry “Kiki” Saavedra, D-Albuquerque. Saavedra said he’d only had three hours of sleep, and his nerves were clearly frayed.

“It’s pretty hard to figure out. … We met for two days, at least three days, back and forth. They all voted for the budget, they all stuck in their little amendments… and so everything was perfect,” he said. (See the video for more.)

Saavedra said there would be a cooling off period before the parties can make a compromise.

Asked who is to blame for the slowdown on the budget, Saavedra replied with a smile: “Not me, said the little red hen.”

Rep. Luciano “Lucky” Varela, D-Santa Fe, who serves on House Appropriations and Finance as well as the bicameral Legislative Finance Committee, expressed frustration with the changes this late in the game; in a 30-day session, moving the budget along is the primary concern.

“Any changes to the bill will have to go back for printing and the bill’s already been printed, so it’s almost impossible to do any kind of changes in the House,” Varela said. “But we could still carry those forward to the Senate and, if there’s agreement on that, we can have the Senate consider our concerns about additional changes.” (See the video for more.)

‘Working out the details’

Although a sleep-deprived Saavedra said nobody’s talking to him about a compromise, one of the Appropriations Committee’s Republicans says he’s sure it’s happening.

“We’re working out the details,” Rep. Don Tripp, R-Socorro, said Wednesday, referring not exactly to himself, but to legislative leaders. ”I think we all want to move the budget forward… and there will be give and take.”

“It’s awfully hard to budget a new initiative when you’re not sure if the money’s going to be there,” Tripp said.

This kind of back and forth is typical of the budget process, and a compromise will likely come in the next day or so, said the House minority leader, Tom Taylor, R-Farmington.

“The fact of the matter is it’s always those few dollars that it comes down to and how we’re going to spend them,” he said.

When wil the compromise happen? “Yes,” Taylor replied with a grin.

Daniel Ulibarri

Enacting tax-credit scholarship legislation will enable lower-income and special-needs students to attend schools that will better meet their needs.

Education reform is on the governor’s agenda for the 2012 legislative session. Aside from bills being be introduced on teacher evaluation and reading, efforts are underway to establish the Equal Opportunity Scholarship Act (introduced in the Senate by Pete Campos) and the Special Needs Student Scholarship Act (introduced in the Senate by Jerry Ortiz y Pino).

These bills would allow for tax credits for individuals and businesses that donate funds for scholarships. Organizations can then give scholarships to lower-income and special-needs students to attend the private, parochial and public schools of their parents’ choice.

Passing these bills is important for New Mexico’s economic vitality and our children’s future. Here’s why:

• More than one-third of our students drop out before graduating from high school.
• This must be turned around in order to attract new businesses and business growth in our state and to give our children the opportunities they need to succeed in school.
• This legislation will help provide scholarships that will enable lower-income and special-needs students to attend schools that will better meet their needs. They will be much more likely to stay in school and to develop a solid educational foundation.

According to recent polling data, more than 70 percent of N.M. voters support tax-credit scholarships for children from low-income families. For special-needs students, the support for tax-credit scholarships rose to an astonishing 78 percent in the poll.

High levels of popularity have been experienced wherever tax credit scholarships have been enacted. In 1997, Arizona created an individual tax-credit scholarship program. Within two years the program became revenue neutral and is projected to raise an estimated $58 million annually by 2015 for scholarship donations. Just last year, 30,000 Arizona children used tax-credit-financed scholarships to improve their educations.

Arizona’s program has been seen as a great success for both providing increased education opportunities as well as being a revenue-neutral program for the state.

While money is still tight, the good news is that these tax credit bills will actually have a slight, positive impact on New Mexico’s budget. Rather than sucking resources out of the budget, these bills would give greater educational choice to parents and students, all while slightly improving the budget.

Education tax credits are not a partisan issue. While the bills this session have been introduced by Democrats, many Republicans, including Gov. Susana Martinez, have pledged their support.

This pattern has held in other states that have considered education tax credits. In addition to Arizona, the states of Florida, Iowa, Pennsylvania, Arizona and Rhode Island saw bipartisan coalitions of legislators and governors work successfully to set up tax-credit scholarship programs.

Ulibarri is executive director of Educate New Mexico.

Bill Jordan

Imagine how we would sound if we used words like ‘roads,’ ‘education,’ ‘public safety,’ and ‘heath care’ instead of ‘taxes.’ Would you want to be heard saying, ‘I can’t believe I pay for roads when I fill my gas tank?’ Or, ‘First responders really hike up the cost of my mortgage?’

Taxes matter. Despite the beating they get in public discourse, taxes are not bad. They are not to “blame” for any number of evils. They are simply a tool.

Taxes are the pooling of our resources in order to accomplish things collectively that few of us could accomplish on our own. Taxes are how we build roads, educate kids, maintain law and order, and provide a whole host of other services and infrastructure few of us would be willing to live without. Taxes are our investment in our quality of life.

But the way they are talked about, you would think taxes are a proxy for something sinister.

Taxes are a proxy — for something necessary, not something bad.

Imagine how we would sound if we used words like “roads,” “education,” “public safety,” and “heath care” instead of “taxes.”

Would you want to be heard saying, “I can’t believe I pay for roads when I fill my gas tank?” Or, “First responders really hike up the cost of my mortgage?” Or, “My water bill wouldn’t be so bad if I could get out of paying for public safety?” It might make us sound stupid or shallow, but we would, at least, be speaking more honestly about taxes than we do now.

What do we want to accomplish as a community?

Taxes are a big topic of discussion at the Roundhouse these days, thanks to a couple of recent studies that rank the states on their various tax rates. New Mexico’s taxes are either too high or too low, depending on which study you favor. But imagine how the conversations might sound if legislators used the same technique cited above when talking about taxes.

You might hear, “Our network of roads and traffic signals is a burden to new businesses.” Or, “Companies don’t relocate here because we educate our populace.” Or, “We’re never going to recruit new business until we cut back on our court system.”

The point of this exercise is that when we talk about taxes we’re generally taking about the wrong issue. What we should really be talking about is what we want to accomplish as a community. What kind of state we want to live in. Do we want to live in a state where 25 percent of children lived in poverty before the recession? Are we OK with only providing pre-kindergarten to 15 percent of our 4-year-olds? Can we ignore the fact that tens of thousands of our children can’t see a doctor for routine health care?

You’d be hard pressed to find a legislator on either side of the aisle who would answer “yes” to these questions. But you would find some that want to cut our tax rates even though such a move would only sap our ability to solve these problems.

What matters is why we collect taxes

Taxes matter. It matters how much money the state collects and from whom it is collected. But what matters most is why we collect them in the first place.

Roads. Education. Public safety. Health care. These are not partisan issues. Most of us agree that we want these things — not just for ourselves but for our families, our neighbors, and the generations that will follow us.

Maybe if we spent more time talking about why we collect taxes, we would agree more on how much we should collect and from whom.

Bill Jordan is policy director at New Mexico Voices for Children.

Michael Swickard

The woman looked pitiful in the interview. “I just can’t quit smoking; it’s that secret stuff companies put in them that keeps me from quitting.” She brushed back a tear. “Cigarette companies did this to me.”

The interviewer accepted her assertion. However, people in prison say, “If you can’t stand the time, don’t do the crime.” There is no avoiding the consequences of actions. This woman made a case for it being someone else’s fault she didn’t stop smoking. But she cannot avoid the results.

The woman smoked for many years because she wanted to smoke. She ignored the people around her who spoke to the dangers of smoking. All smokers know before they start that it is not healthy. They also know it is a hard habit to break. Each has reasons for why he or she started and why they continue despite the dangers. Likewise, many geezers say, “Nope, never smoked.” No one pesters them about why they did not smoke.

Each of us makes a conscious choice to smoke or not, just as each of us eats healthy or drives safely. The other day someone passed me over a double yellow line and narrowly missed an oncoming car. They may make risky maneuvers many times before they are killed. Whether it is driving, drugs or anything else, the thing about consequences is that, while they are not applied every time, sooner or later they always come to bear.

This is a long introduction to my concern that our nation cannot continue to elect people who allow our nation to act financially irresponsible. One day this cancer of spending without restraint will metastasize into a nation killing calamity. We have the example of Greece, where much of their future was expended in the past for political advantage. Now their future is bleak, at best.

During the last 50 years our nation has taken a giant leap from our collective financial senses to enjoy the short-term political advantages of irresponsible gathering of debt while ignoring the prospect that comes with the long-term debt. There is no escape from those consequences, only delay.

Individual politicians say they have to be financially irresponsible or be thrown out of office. That is true. If a candidate does not clamor for money to bring to the district they are unelectable. Current politicians only have one plan: “I will spend the resources of our nation on you, whether we have resources or not.”

The problem is us

So, my fellow Americans, we have discovered the problem and the problem is us. Now that we have the culprit firmly grasped by the collar what are we to do with ourselves? The politics of promise is where the power and money is in our society. Anyone with a frugal streak is unelectable because voters rightly understand that if one state foregoes the federal largess another state will get that benefit instead. Voters rationalize that someone will get those resources; we must elect someone to look after our short-term interests.

At the core what is being practiced in our country is a political system designed to give amazing power to a few while taking the resources of many. Because so many people benefit from the theft of resources, there are not enough protestors to the theft of our country’s future. Know this: The promises sound great but are not sustainable. One day the bill will come due. Our country will be like Greece in that riots will precede the collapse. Will there be a collapse? There has to be, no other outcome is possible.

Comingled with our financial crisis of spending significantly more than we have is the crisis of entitlement. What drives our public policy is, “I deserve this and more.” Americans say, “As long as I vote as I have voted I will always have what I have had.”

The sense of entitlement is the thing that is essential for politicians to trade the resources of a nation for their control of that nation. At the very least we need truth as to the direction we are going. We all know we cannot spend without restraint much as we know that smoking is unhealthy. There will be final consequences.

Swickard is co-host of the radio talk show News New Mexico, which airs from 6 to 9 a.m. Monday through Friday on a number of New Mexico radio stations and through streaming. His e-mail address is michael@swickard.com.

“Bank of America won’t take my mortgage payment. I have a job now and yet they refuse to re-instate my payments. I feel like a sitting duck,” said Rose Ann, who had fallen behind on her mortgage when she lost her job last year, but has since regained employment and is able to maker her payments once again. The problem: Bank of America will not work with her to reduce the amount in arrears and get her life back on track.

Rose Ann is just one of thousands of New Mexicans facing foreclosure. As her story reveals, so many of these families could lose their homes simply because their lenders refuse to negotiate in good faith with them to find a win-win solution.

Last year, the state Legislature had the chance to help New Mexico homeowners who are struggling to negotiate with their lenders. But the Legislature failed to act, and countless families needlessly lost their homes as a result. They have a chance to get it right this year with the introduction of several bills aimed to help prevent unnecessary foreclosures:

• Senate Bill 1, sponsored by Senator Michael Sanchez, D-Belen, strengthens due diligence on the part of banks to ensure that homeowners have had proper notice, and it stops the “dual track” practice of foreclosure proceedings.
• Senate Bill 75, sponsored by Senator Steve Fischmann, D-Las Cruces, requires mediation during the foreclosure proceedings that could provide homeowners the opportunity to have a third party with them in negotiations and leverage someone from banks with authority to modify a loan.
• Senate Bill 38, sponsored by Senator Gerald Ortiz y Pino, D-Albuquerque, would provide the state with $1 million in funding for financial and foreclosure counseling before people start a foreclosure process.

All of these are critical because together they address the obstacles and phases a homeowner will face if they find themselves unable to pay their mortgage.

An encouraging sign

In an encouraging sign, Governor Susana Martinez kept these on her list of messages she sent to the Senate this week. The governor understands that healing the housing market is essential for rebuilding the state’s economy.

It is important that the state take action on this issue and not rely on federal bank regulators to look out for the best interests of New Mexico borrowers. Federal regulators such as the Office of the Comptroller of Currency (OCC) consistently side with the interests of the nation’s big banks, even going so far as to call them their “clients.”  Meanwhile, many community banks that play by the rules get the short end of the stick when their larger competitors are given such preferential treatment.

To put a meaningful dent in the crisis, state legislators must put an end to the so-called “dual track” process that allows banks to move forward with the foreclosure process even while homeowners are applying for a loan modification. They must also address the lack of counseling services for homeowners who need assistance in navigating the confusing world of negotiating with their bank. And they should assure that no homeowner ever has to face a situation like Rose Ann’s by requiring lenders and borrowers to meet for a face-to-face mediation session before any foreclosure is allowed to proceed.

Similar legislation passed in Hawaii has driven down foreclosures by 50 percent.

Federal action also needed

And while we cannot rely on friendly bank regulators at the federal level to solve the crisis, we do need action from Washington. Those of us gathered at the rotunda were heartened to see the president announce during his State of the Union speech that he would be launching a joint investigation into the abusive lending and packaging of risky mortgages that led to the housing crisis. We need President Obama to follow through on his pledge and conduct a thorough investigation that provides meaningful relief for homeowners commensurate to the scale of the banks’ misconduct.

The urgency of helping homeowners in New Mexico is growing. Senators from both Central and Southern New Mexico are rallying together, the Conference of Catholic Bishops is working hard to highlight this need, and the House should respond with energy and urgency as well. If we don’t get involved in working our hardest to keep families in their homes, it is unclear to us what we are willing to do to help fellow New Mexicans.

Nolan, executive director of NM Comunidades en Acción y de Fé (CAFé), and Martinez, co-director of Partnership for Community Action, are part of a growing number of New Mexicans pushing to hold the banks and government accountable for fixing the housing crisis. Learn more at OrganizeNM.org. 

Paul J. Gessing

Rhode Island’s is not the only reform model in terms of specific policies, but it is a model for New Mexico in terms of political will and desire to preserve itself for future generations.

The opportunity to get something for nearly nothing is rare indeed. It is even rarer when one is talking about government, an entity that known more for turning something into nothing than the other way around.

But there was recently some good news on the government efficiency front in this country. Not in Washington, where the monopolistic federal monolith continues to grow unabated, but at the state level, where Americans can vote with their feet in search of economic freedom and sound economic policies.

The glimmer of hope comes from Rhode Island, the smallest state in the nation and a state controlled by relatively liberal Democrats at the legislative level and a moderate governor who labels himself “independent.” Politically, we’re not talking about Texas here. Nor are we talking about Wisconsin, where Gov. Scott Walker took the government unions on directly and demanded concessions, thus generating a national debate that is still under way.

But we are talking about a state, Rhode Island, which had the steepest population decline last year, a factor that undoubtedly spurred legislative action.

Rhode Island, perhaps because its leaders were free of the Republican stereotype of being “anti-labor,” successfully tackled the thorny issue of government pensions and did so in a way that has been below the radar screen and that has not generated the massive outcry and public rallies that were seen elsewhere.

Rhode Island, like New Mexico and so many other states, had let its government employee pension system grow out of control over the years. For political reasons, funding has not kept up (and was never going to) with over-generous promises for the future. According to the Pew Center on the States, Rhode Island’s unfunded pension liability had grown to $4.7 billion, with only 59 percent of its system funded.

Democrats supported changes

What exactly happened in Rhode Island? In general, by making hard, politically-unpopular decisions now, Rhode Island has made state government more sustainable and able to provide the services that its citizens rely on for a far more reasonable cost.

Specifically, policymakers suspended annual 3-percent cost-of-living increases until funds become solvent and voted to raise the retirement age for most workers to 67 from 62. Most significantly, they shifted all state workers to a hybrid pension plan that includes a defined-contribution component and a small annuity.

Unions balked, as they have here in New Mexico over much smaller proposed changes. The difference is that Rhode Island’s liberal Democrats, realizing that if left un-reformed government pensions would slowly crowd-out other spending on education, transportation, Medicaid, and the like, voted for the changes anyway. Despite threats of lawsuits, 77 of the state’s 94 Democrats in Rhode Island supported the changes.

NM must begin bipartisan discussion in earnest

New Mexico’s problem, while not as bad as Rhode Island’s in percentage terms (76 percent of our system is funded), is bigger in aggregate terms and worsening. According to the same report, New Mexico was one of 10 states to drop below 80 percent pension funding in 2009, and our total unfunded pension liability was $7 billion.

Unfortunately, to date, New Mexico legislators have not even taken the modest step of changing plans for future workers to the 401K-style plans available in the private sector. These plans are actually popular with many young workers as, unlike pensions, they own and control their own money rather than relying on politicians to make sure that adequate funds are put aside.

Rhode Island’s is not the only reform model in terms of specific policies, but it is a model for New Mexico in terms of political will and desire to preserve itself for future generations.

As the Legislature meets in Santa Fe, the discussion of how to reform New Mexico’s pension system must begin in earnest and must cross party lines.

Paul J. Gessing is the president of New Mexico’s Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.