Before the Legislature headed home from a budget-balancing special session, it handed Gov. Bill Richardson a powerful tool in case New Mexico faces a deficit in the coming year.

Tucked away in a more than 200-page budget bill is a provision giving Richardson — and the person elected in November as New Mexico's next governor — the power to make across-the-board cuts in state programs and agencies if a revenue shortfall happens in the next fiscal year and the deficit can't be covered with money from cash reserves.

The message to Richardson: Fix the mess yourself and don't call us back into another special session.

It's a surprising turn of events in what has long been a tug-of-war between legislative and executive powers in New Mexico.

If the budget provision is used, it could force Richardson or his successor to make politically painful decisions that cause layoffs or salary reductions for public employees and curtail services. The provision says no cuts are to be made by the governor to Medicaid, which provides health care to the needy, or to support programs for the developmentally disabled.

Lawmakers grumbled last fall when Richardson vetoed part of a deficit reduction bill because he considered the proposed cuts too harsh for administration agencies. He said they would have forced a dramatic reduction in services, potentially even the early release of inmates. The Democratic governor issued an executive order to implement budget cuts he considered acceptable.

Legislators traditionally have been very protective of their power to appropriate money, but nobody went to court to challenge Richardson's budget decisions.

Richardson's predecessor as governor, Republican Gary Johnson, wasn't so lucky when he had to deal with a looming budget deficit in his first year in office.

In 1995, with New Mexico's revenues falling short of what was needed to cover spending, Johnson ordered across-the-board reductions in the amount of general tax money that's distributed monthly to most state agencies. The cutbacks were to reduce spending by 2.5 percent and applied to much of government — from executive branch agencies, including the Governor's Office, to colleges and universities. Public schools weren't subject to the reductions. Johnson also agreed not to apply the cuts to the court system and the Legislature, although both volunteered to reduce spending.

However, several district attorneys filed a lawsuit. They argued that Johnson had usurped the legislative power to make appropriations. The state Supreme Court agreed and ordered the Johnson administration to restore money that had been withheld.

Fifteen years later, the Legislature has agreed to turn over the purse strings to the governor if a serious budget problem arises in the next fiscal year, which starts in July and runs through June 2011. A new governor will take office in January, 2011.

Many in the Legislature, including some Democrats, worry that another budget shortfall could happen. They say next year's state budget is based on overly optimistic projections of revenue growth. Administration officials disagree and defend the revenue forecast, which was done by executive and legislative branch economists.

House GOP Leader Tom Taylor of Farmington warned his colleagues during last week's special session that their budget-balancing efforts may fall short in the coming year.

"Our chances of being successful in this are so slim it isn't funny," said Taylor. "We're about to cross an economic desert and everything that we're doing is assuming that there is an oasis over every dune."




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