Money got even tighter today at the Statehouse.

Governor Richardson’s budget secretaries appeared before the Legislative Finance Committee (LFC) this morning and announced that their estimate for recurring revenue for the fiscal year just completed (2010) is down by $32.5 million and off by $159.3 million for fiscal year 2011.

The $32.5 million figure can be covered by reserves but the $159.3 million figure is much more problematic. Unlike the federal government, state governments much balance their budgets each year. To make up for $159.3 million shortfall, expect further budget cuts, calls for tax increases and more furloughs, salary cuts and layoffs among state employees.

The Governor’s Office and the House of Representatives made their estimates back in December of 2009. The Senate Finance Committee delivered a more bearish estimate but was outvoted 2-1.

Why did the December estimates miss the mark by so much? The short answer is the crummy economy. Drops in the gross receipt tax, the sales tax, personal and corporate income taxes and the continued slowdown on a local and national level all contributed to smaller amounts coming into state coffers than was hoped.

For Vice Chairman of the LFC and longtime fiscal hawk John Arthur Smith (D-Hidalgo, Luna, Sierra), Governor Richardson has to take a large share of the blame:

Lawmakers say that Medicaid and funding for the Developmentally Disabled will not be touched but emphasize that every other state funding program is on the table.

As to how New Mexico taxpayers will react to the news, here’s Smith:

By the way, $159.3 million represents about 3 percent of the state budget.