The House and Senate appear to be close to agreeing on a budget and revenue package that reduces potential harm to our members in a huge way.  Due to the nature of some of the agency and university cuts, it's not entirely guaranteed that there will be no furloughs throughout Fiscal Year '11, but most legislative leaders and some administration officials indicate that they believe our members will be held harmless.  We are still trying to shore up the final budget and revenue numbers to protect members as much as possible.

Of course, even if we survive FY '11, that's after already having a 1.5% pay cut and five furlough days, so it's not as though we haven't done our part.  And depending on vacancies and other agency-specific issues, there may be some furlough days in FY '11--there's no way to know for sure at this point.

However, we killed a direct hit of an additional 2.64% pay cut and even deeper proposed cuts to agencies and universities.  When I say "we", I really mean all of you--those of us up here every day for the last six weeks saw how the thousands of emails and phone calls and the two massive rallies changed the position of legislators who initially were looking at layoffs and other big cuts.

Earlier tonight the Senate passed a revenue package worth $240 million which is a mix of progressive and regressive measures.  The best news is that PIT add-back, which you pushed for so hard in the last day, ended up being included.  It was slightly modified to preserve the ability of itemizers to deduct the previous year's property taxes, meaning its final value was just about $68 million.

The state will also stop paying "hold harmless" payments for the city and county shares of the food tax, but the cities and counties will get that money back by the re-instatement of their share of the food tax.  For most people in the state, this will mean that the GRT on food will run anywhere from 1% to a little over 2%, or less than a third of normal GRT.  If the cities and counties want to eliminate their share, they can choose to do so, but then they would have less money that wouldn't be backfilled by the state.  Savings to state: about $71 million.

The overall state share of GRT will be increased from 5.0% to 5.125%, or a 1/8 cent increase.  For every $100 spent on most items (but not food, for which there will be no state GRT), New Mexicans will pay an extra twelve and a half cents.  Expected revenue: $62 million.

There are some smaller measures related to the collection of GRT from out-of-state sellers (a compensating tax) which bring the Senate revenue package to about $240 million.

The House passed a cigarette tax of 75 cents that will generate about $25 million, but unfortunately siphoned one-third of that amount away from the general fund (it went exclusively to education).  Education is extremely popular with a large group of legislators who work for Albuquerque Public Schools, and while we also support education, we believe that the best revenue policy is to put money into the general fund where all of education, state employees, and university employees can benefit instead of just one group.

Additionally, while harder to predict, a tax amnesty program may bring in as much as $40 million in one-time revenues.

A few minutes ago, the House just passed its version of the budget by 39-27.  For state agencies, it is virtually identical to the House bill passed during the 30-day regular session, meaning cuts of around 2-3% for many agencies and no direct cuts to public employees.

Given where we started in January, this is a near-miracle revenue package.  If state revenues don't decline more, if the tax amnesty program works, and agencies and universities are willing to eliminate vacancies and expenses, there's a great chance we'll come out of Fiscal Year '11 without additional hits to workers.  How the state fares over the next few months will determine whether we avoid furloughs at all, but it looks like there will not be layoffs and that furloughs will either be non-existent or very limited.

These are brutally hard times all over America and New Mexico, in the public and private sectors.  I am proud to be part of a union whose members and families have fought non-stop for themselves and all workers in the state.

It remains to be seen whether all the revenue items passed by the Senate will be adopted by the House, but if they are, this is about the best package we could possibly have gotten out of this legislature.  I may not be able to do an update right when they finish the budget, but I'll let you know as soon as possible.  Keep calling the list of legislators from update #6, and ask them to support revenues sufficient to avoid any additional cuts to state and university employees.