Nation could lose building money in state cutbacks

Copyright © 2008
Gallup Independent
By Kathy Helms
Diné Bureau

WINDOW ROCK — New Mexico Gov. Bill Richardson’s plan to save up to $300 million on stalled capital projects to shore up state revenue could mean a loss of more than $8 million to the Navajo Nation.

Richardson announced plans Friday to respond to the global financial crisis after receiving confirmation that revenue for the ongoing 2009 budget year will be about $344 million lower than previous estimates, and $200 million less than FY ‘09 budgeted expenditures.

Budget and Finance Committee Chairman LoRenzo Bates said New Mexico Sen. Lynda Lovejoy reported Monday morning to the Northern Agency Caucus that “upwards of $8 million of state money that was appropriated to the Navajo Nation for capital improvement projects could revert back to the state of New Mexico as a result of Gov. Richardson’s concern and cutbacks for the state of New Mexico.”

Bates, who represents Upper Fruitland, said it could affect some of the 53 projects in the Master Intergovernmental Agreement approved Sept. 23 by the Nation’s Intergovernmental Relations Committee and signed Oct. 2 by the state. The agreement was designed to reduce bureaucratic red tape and clear the way for $3.9 million in 2008 capital outlay projects. A call to the governor’s office on Friday had not been returned today at 9 a.m.

“The one question that we had was, given the agreement that was approved by IGR several weeks back, how those projects would be affected,” Bates said. “The other question was how it impacted the Tribal Infrastructure Fund. Right now, that’s not a recurring appropriation, so it could be impacted also. The Tribal Infrastructure Fund is money that has not been encumbered by the state.”

Shiprock Delegate Pete Ken Atcitty said caucus members were told that monies from 2005 and prior would go back to the state to make up for the funding shortfall and that the Tribal Infrastructure Fund won’t exist in future years.

“That’s another source that a lot of the chapters in the state of New Mexico utilize for projects also,” he said.

Atcitty’s concern is there are monies from the Navajo Nation’s resources, such as oil and gas, that go to the state of New Mexico in the form of tax revenues. “What I wanted to know is how much does the Navajo Nation contribute to the state of New Mexico’s coffers and how much do we get back each year as far as funding requests for projects or programs. The other concern that I have now is we’re being told that we could possibly lose money or get less money in future years.”

The Navajo Nation is poised to open its first casino in November. In response to a question from Atcitty during Monday’s Navajo Nation Council session following the State of the Navajo Nation address, President Joe Shirley Jr. indicated that under the state gaming compact, the state will get 8 cents for each dollar the Nation makes.

“When you look at it, the Navajo Nation assesses sales taxes on the Navajo Nation and we only get 4 cents back for every dollar. So if we have 8 cents going to the state, that’s a lot of money that the state will receive from the Navajo Nation for gaming, especially if you’re talking millions and millions of dollars and that development will continue on in future years.

“We want to know, are we actually getting our fair share as far as what we contribute to the state and what comes back — if it’s a fair and balanced distribution of those funds. If we get actual numbers, I bet they would show that it’s not equal and it’s not balanced.” He said the Nation needs to take a stand.

Bates said some members of the Northern Agency Caucus will attend the state Indian Affairs Committee meeting next week and then caucus members will meet the next day in Window Rock to discuss the meeting and decide a strategy for possibly averting cuts to the capital projects.

“Given the financial environment right now, given the fact the state of New Mexico has lost up to $1 billion of their investments, one can see why they’re doing what they’re doing,” he said, adding that if the Nation had the $8 million match right now to spend on the projects — which it doesn’t — it would be in a better position.

Council provided the opportunity for the capital projects to be started on with grant funds, Bates said, “but because there were no policies, no procedures in place to do that, the money just sat there for up to six months.”

In the FY2009 budget there are Conditions of Appropriation, including one COA that gives the Capital Improvement Office until the end of the first quarter to get their policies and procedures in place, Bates said, “But by then it’s going to be too late.”

Richardson is calling for the deauthorization of several capital outlay initiatives previously passed by the Legislature. There are $63 million in capital projects that are more than 3-years old and have not moved forward, and another $168 million in projects valued at less than $100,000 each, according to a press release from the governor’s office.

Richardson directed the Department of Finance and Administration to re-evaluate existing capital projects and identify delayed initiatives around the state. Projects that are stalled, under-funded, or not up to date in their financial reporting will be identified for potential cuts.