Chair of House Appropriations Committee Says New Mexico Needs to Heed Warning from Moody’s on Kansas
Credit Ratings Agency Rebukes Governor Brownback’s Veto of Tax Legislation
Santa Fe, NM – The Chair of the House Appropriations and Finance Committee warned today that New Mexico and Governor Susana Martinez should heed the warning of Moody’s stiff rebuke of Governor Sam Brownback of Kansas. Last week, Gov. Brownback vetoed legislation that would’ve increased tax revenue and rolled back tax exemptions and cuts from 2012. The Republican-controlled Kansas legislature passed a bill to increase Kansas’ revenue as that state faces an estimated budget shortfall of more than $500 million in FY 2018.
Today, Moody’s criticized the veto saying: “Continuing to resort to stop-gap measures that do not resolve, or may even worsen, the state’s long-term structural problems would intensify the pressure on Kansas’ credit quality.” Moody’s commentary constitutes a “credit negative” to Kansas, a warning that the state’s credit may be at risk in the future.
"The credit ratings agencies are evidently keeping a close eye on us to make sure we do the responsible thing and raise revenues to get New Mexico out of this fiscal abyss," said Rep. Patty Lundstrom (D-Gallup), Chair of the House Appropriations and Finance Committee. "We call on Governor Martinez to heed this stern warning and join us and our partners in the Senate in charting a new course for the state."
Last Wednesday, the New Mexico House of Representatives passed a revenue package to raise new money for the state to mitigate and avoid further devastating cuts to education, health care, and other critical areas. The estimated $250 million in revenue from the bill would also increase the state’s cash reserves to 3% of expenditures, in the hopes of avoiding a second credit downgrading from Moody’s. The package, HB 202, must pass the Senate before heading to the Governor’s desk for her signature, but the Governor has already balked at the idea saying it is disconnected from New Mexico’s values.
Governor Brownback issued similar statements at his veto ceremony saying the legislation was a “punitive tax.” His veto narrowly survived an override attempt, succeeding in the Republican-controlled House, but falling three votes short in the Republican-controlled Senate.