The UNM administration is gladly accepting federal stimulus funds to replenish half of the Instructional and General budget cuts, but the University is also looking past the one-time stimulus package to next fiscal year, when the government might not be so generous.
House Bill 17, which passed at the New Mexico State Legislature’s special session this month, hands down a 4 percent cut for I&G funds and a 6.5 percent cut for “below the line” programs, like the ethnic centers and other special projects.
Governor Bill Richardson has 20 days to approve HB17.
However, half of the 4 percent I&G cuts will be supplanted by federal stimulus funds, making the total cut $3,751,780 out of an I&G operating budget of about $187.5 million for UNM, the Health Sciences Center and the branch campuses.
Because the American Recovery and Reinvestment Act is a one-time stimulus package, state legislators and UNM budget office employees are anticipating several fiscal years of financial hardship. Marc Saavedra, director of government relations at UNM, said public education and higher education might see cuts in Fiscal Year 2011.
“Unless for some reason revenues get better — if for some reason they start having revenue enhancement bills that generate additional revenue — you’ve got to find money somewhere to replace that stimulus money, whether it’s public schools or higher ed.,” he said.
Saavedra said a historical example supports his bleak projection.
“In about 1983, they refer to it as ‘the bottom fell out’ of the New Mexico state economy,” he said. “Gas was down, gross receipts was down, unemployment was up, so the bottom fell out … They had to make cuts and they had to increase taxes. That tax structure became a very strong revenue source for the state of New Mexico. That took about a good 10 years to get back to where they were in 1983.”
As a result, Saavedra said the University and the state need to be fiscally responsible in the coming years.
“We still need to keep in the back of our mind that it’s non-recurring money,” he said. “We’re not going to fool ourselves into thinking this is recurring money. It’s stimulus money. It goes away.”
In his Monday-morning message, President David Schmidly said Provost Suzanne Ortega and his administration have anticipated budget cuts and are creating possible budget scenarios to cope with the problem.
“The Governor has (20) days to consider this solvency plan, but now is the time for us to finalize scenarios for consideration by the Regents,” Schmidly said in his message. “Provost Ortega and the deans have been planning for the inevitable for several weeks. Our goal is to preserve as much as possible services that impact students.”
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As for the 6.5 percent cut to special projects, the ethnic centers are guaranteed protection and the UNM administration will collaborate with directors and project managers before the cuts are implemented, said Saavedra.
“We’ll keep the ethnic centers harmless. It’ll be a process that has deans, directors (and) project managers,” he said. “All of them will be involved in how to implement that. It won’t be done in a vacuum.”
