While there isn’t much direct democracy in the Land of Enchantment, this year voters will get the chance to vote on an important component of state fiscal policy: debt.
General obligation (GO) bonds, backed by a statewide property-tax levy, go to the electorate in even-numbered years. The capital expenditures are separated by category, a useful breakdown that allows voters to approve one type of borrowing while rejecting another.
* Bond Question A would borrow $15.4 million “for certain senior citizen facility improvement, construction and equipment acquisition projects.”
* Bond Question B would borrow $10.2 million “for academic, public school, tribal and public library resource acquisitions.”
* Bond Question C would borrow $142.4 million “for certain higher education, special schools and tribal schools … improvements and acquisitions.”
* Bond Question D would borrow $18.2 million “for state police, public safety communications and national guard facilities statewide.”
Add it all up, and legislators are asking voters to put another $186.2 million on the state’s credit card. (Here’s a link for more details about the individual projects to be funded.) The vast bulk of that borrowing would benefit government-run universities and colleges, and higher-educrats know it. Here is Dr. Christopher Dyer, CEO of UNM’s branch campus in Gallup, asking voters in McKinley County to approve “$1.5 million … to be used for planning, designing, construction and equipping of a new physical plant facility.”
New Mexicans usually approve the issuance of GO bonds. But it’s worth noting that in September, Moody’s Investor Service announced that it was “considering downgrading the state’s top rating for general obligation bonds.” The recent special session may have alleviated concerns about New Mexico’s finances, but with stagnant economic growth, high unemployment, and a low workforce-participation rate, there’s little doubt that ratings entities will remain suspicious.
The State Board of Finance estimates that if approved, “over a ten-year period, the four issues on the ballot would increase the average annual property tax bill by approximately $9.34 per $100,000 of asset value.” That may not sound like much of an additional burden to some. But this year, perhaps a majority of voters will decide that any tax hike, in a state that still hasn’t recovered from the Great Recession, isn’t wise.