Lt. Gov. Diane Denish Announces Reform Proposals to Save New Mexico Millions of Dollars

Citing the national recession and the state’s current budget shortfall, Lt. Governor Diane Denish today announced a series of reforms that she claims, if adopted, could save the state millions of dollars. She's clearly taking a proactive stance in proposing measures she'd like to see taken up by the New Mexico Legislature in January.

Denish today called for (1) a major overhaul of the state’s capital outlay process, (2) an immediate end to “double-dipping” by certain state employees, and (3) better use of technology to streamline government operations. If implemented, the reforms proposed by the Lt. Governor would save the state millions of dollars, according to a statement released by her office about the proposals.

“During these challenging economic times, we must act boldly to make our state government leaner and more fiscally responsible,” said Denish. “Before anyone considers further cuts to education or health care, we simply must do everything possible to make government more efficient. Taken together, these reforms will save the state millions of dollars, generate economic activity in both the short term and long term, and provide greater accountability to the public for how their tax dollars are spent. New Mexico families are tightening their belts and government must do the same.”

1) Capital Outlay Reform:
Lt. Governor Denish believes that when used wisely, capital outlay monies can go a long way towards stimulating the economy, generating new commercial developments, improving schools, and, in general, improving the day to day lives of New Mexicans. However, the current process gives direct control to state elected officials for every dollar spent, resulting in some good projects being under-funded while stagnant or premature projects receive millions of dollars that could be better spent.

Therefore, Denish is calling on the legislature to dramatically reform the state’s capital outlay process by taking the following steps:

• Create a state Capital Outlay Planning Board charged with drafting and maintaining a five-year comprehensive capital outlay plan to ensure all communities strategically receive the resources they need when they most need them. This board will be made up of members of the legislature, the Executive, the private sector and local governments.

• Prohibit using long-term bonds to finance assets with life spans shorter than the life of the bonds. For example, computers and furniture should be funded with available funds from the general fund rather than through selling bonds that take ten years to pay off. This will ensure the state’s bonding capacity is used correctly and in a fiscally prudent manner.

• Focus and prioritize the state’s local government division within the Department of Finance & Administration on improving performance of its capital outlay work, eliminating the unit's role in other non-core activities that distract from the main mission of making sure our dollars are well spent.

• Establish a minimum project size to qualify for Severance Tax Bond and General Obligation Bond funding. Setting a project size minimum would ensure the state’s priorities are strategically funded first, benefiting all citizens across the state.

• Help local governments prioritize which projects they request capital outlay funding for, limit the number of prioritized projects they can request to 3 per year, and require funded local government projects to meet clear benchmarks and show tangible progress before any additional local government requests are made.

• Create a variable, matching-fund requirement to increase opportunity for rural communities to access capital outlay project funds.

Taken together, these measures will help the state better leverage its bonding capacity and strategically invest in capital projects for the benefit of all citizens, not just favorite pet projects that often are not completed, according to Denish.

2) End the practice of “Double-Dipping”:
Lt. Governor Denish believes it is unfair and bad fiscal practice to allow certain retired state employees to earn a state salary and receive a pension at the same time, while not providing their fair share of employee pension contributions. Denish believes we must immediately eliminate lucrative loopholes for “double-dippers,” which could save the state more than $7 million a year.

3) Improving technology systems:
Denish believes that better choice of and use of new technology can generate significant savings for the state. While the state’s track record on implementing new technology systems is not always stellar, Denish believes the state’s Department of Information Technology should be required to evaluate and consider all alternative technology solutions that can save the state money. For example, switching the state from current systems to Google Apps could generate as much as $1.9 million in recurring savings. While numerous cities and even the federal government are beginning to take advantage of creative, lower cost solutions like this, it makes no sense to stay the course with “Cadillac” technology solutions for state workers.