During his two terms in office, Gov. Bill Richardson has overseen some of the state's most flush times, making other governors jealous and endearing him to a variety of causes around New Mexico.

He secured a multimillion-dollar commuter train, an astronomically priced spaceport and a litany of new programs.

And while those projects surely will mark Richardson's place in state history books, his legacy might also be in how he handles the now lean times.

In the special session that starts next week, Richardson has proposed $444 million in cuts to state spending — starting immediately. As deficit projections continue to worsen, he'll have to decide on even more cuts, lawmakers say.

Richardson, a Democrat who leaves office at the end of 2010, says he won't cut education spending. And he says, he won't in this session roll back the personal income tax cuts for wealthy New Mexicans, a move that earned him national accolades after he took office in 2003.

So how will he work to balance the budget, and will that dramatically change his legacy?

Already, the governor has proposed a 3 percent reduction in all state spending except public schools. He wants to use $91 million in stimulus money for public schools, divert money from short-term bond proceeds for future capital projects, and delay increases to retirement and health care authority funds. His plan also calls for canceling some already approved capital-outlay projects and using $40 million in cash balances, including $20 million from the College Affordability Fund.

Some say that plan isn't enough and isn't wise, in particular because education makes up about half the state spending.

"I don't know how realistic it is just to hold education harmless at the expense of everyone else," said Senate Finance Committee chairman John Arthur Smith, D-Deming.

"If we're going to hold education harmless, then we need to hold the most vulnerable harmless, and that's (the developmentally disabled) and Medicaid recipients," he said.

Educators, state employees, health care advocates and others have rallied in large numbers against education cuts, and have pushed Richardson to roll back the tax cuts.

Two sides to story

While Richardson's office says the state is facing a revenue shortfall because of "an unprecedented global financial crisis" and can't be blamed on the governor or the Legislature, others say the Richardson administration hasn't grasped the true depth of the problem and hasn't reigned in executive branch spending.

In the past weeks Richardson has traveled to Mexico, Cuba, Kuala Lumpur, the East Coast and the West Coast. Some of the expenses were paid by the state, some by event organizers. Richardson paid his own way to Cuba, but the state picked up the tab for three Cabinet secretaries and a staff member.

Critics point out that during his two terms, Richardson has allowed the practice of double dipping to continue. He's swelled the ranks — and the salaries — of state government, including teachers. He's put in a hiring freeze that has been laughed at by some because of the many exceptions to it that have been made.

Richardson has defended his fiscal ideas, saying the state will avoid deficit spending and layoffs, unlike others in the nation. New Mexico also has avoided drastic steps other states have taken, such as releasing prisoners and dramatically cutting social services to save money.

"Gov. Richardson has consistently managed the state budget in a fiscally responsible manner," said spokesman Gilbert Gallegos. "In fact, New Mexico is much better off than most states as a direct result of Gov. Richardson's fiscally responsible approach to managing the budget. The governor has consistently proposed balanced budgets, while insisting in keeping cash reserves at 10 percent or higher to help protect against unforeseen downturns — like the global financial crisis we are currently experiencing. The fact that we have generous reserves to help us through this crisis is the direct result of Gov. Richardson's fiscal discipline," he said.

At the same time, though, Richardson has made some uneasy by relying heavily on one-time stimulus money for expenditures that are likely to be recurring.

He's also made some uncomfortable with his plan to tap into cash balances to help this budget crunch, including those meant to make college affordable.

And he's bothered yet others by proposing to use so-called sponge bonds to alleviate the budget crisis.

The bonds are short-term severance tax bond notes that in the past have been used for projects like schools, not to cover state operating expenses.

With so many spending decisions still to be made, some say Richardson's legacy isn't in what he's already done, but what he'll do in his last months as governor.

"I think these last legislative sessions are what's going to define him," said Arcy Baca, president of the American Federation of State, County and Municipal Employees Local 477.

"If he has to cut, where is he going to cut: Is it the state employees, is it the gov. exs?" Baca said, referring to employees in exempt position who report to the governor.

"He brought in the double dippers ... is he going to correct that?'"

Richardson this year vetoed a bill that would have stopped the practice of people who retire from the state, then go back to work, a proposal supporters said would have saved the state millions.

Richardson's legacy

Richardson's office said the governor has done the best he can during his term under extraordinary circumstances.

"First, I want to make clear that we are facing a revenue shortfall — not because of the management of the state budget by the governor or the Legislature," Gallegos said. "Virtually every level of government, as well as private industry, is dealing with the ramifications of an unprecedented global financial crisis. Gov. Richardson kept those reserves at record-high levels, while still cutting more than $1 billion in taxes and investing in priorities like education and health care."

The Governor's Office cites spending on education, anti-DWI programs, economic development projects, including tax incentives for programs in the film and aerospace industries, as just a few examples of his legacy.

And supporters of his programs, including pre-kindergarten, other mass transit and energy efficiency projects applaud him, saying he's done more for their causes than any other governor.

But others have different takes.

"The legacy it seems will be that during his terms as the executive, we've spent ourselves nearly into bankruptcy," said House Minority Whip Keith Gardner, R-Roswell. "I think that will be the legacy, that during one of the greatest times of affluence in state government, (Richardson) is ending with significant debt."

The change in the budget picture has been nothing short of dramatic: Shortly after taking office, Richardson had a multimillion-dollar budget surplus on his hands, thanks in large part to booming state oil and gas revenues. The state in 2008 had so much cash, it handed out rebate checks to tax filers of between $25 and $50.

But as the economy shifted and energy prices tanked, things started to change for the governor and the state. Soon, it seemed, New Mexico would be facing unheard of revenue shortfalls.

Some, including Smith, issued early warning calls that the state had a revenue problem — as well as a spending one. While in some circles, Smith was ridiculed for being so pessimistic, some now say he was right.

"The executive branch has been in denial of what is fiscally responsible," Smith said this week. "Trying to be Santa Claus to the entire state is fine when the Santa bag is full and natural gas and oil are delivering lots of gifts, but it's not like that anymore," Smith said.

"I think he'll have a legacy of fiscal mismanagement," he said.

University of New Mexico political science professor Lonna Atkeson said Richardson's fiscal legacy is still a work in progress.

Right now, it could be the tax cuts that curried favor with Republicans and wealthy Democrats, she said. But it remains to be seen whether the state can still afford them and whether enough legislators want to keep them.

"I guess the question is, do all his changes get reversed because of the bad economic times?" she said. "As a lame duck, I don't think he has the capacity to hold that off."

Even with big cuts this year, and next, the state's budget woes could continue, and the bills for some of Richardson's projects will be coming due.

That's a problem that surely will land in the lap of whomever voters in 2010 chose to lead the state.

"The next governor is really inheriting a disaster," Gardner said.

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog at www.greenchilechatter.com.