A provision embedded in the 234-page budget bill that state lawmakers passed this week could provide debt relief to New Mexico State’s two Division I athletic departments.
State Sen. John Arthur Smith, D-Deming, said Friday that the state budget as passed essentially cancels the millions of dollars in debt that the athletic departments of the two Division I colleges of the state owe their respective universities for years of overspending.
“It’s great that the leaders of the state legislature are pursuing this,” New Mexico State Athletic Director Mario Moccia said. “I think we’ve been great stewards of the money we got from the state or the university and balanced our budget in 10 out of 11 years and stuck to the clawback plan that was put in place there. 11 years ago. If additional funds are made available, it would be significant from the perspective of our 400 student-athletes.”
The budget wording prohibits the University of New Mexico and New Mexico State University from using state money – including money from the legislature as well as any other money from the state that winds up in the coffers of athletic departments – to pay off accumulated deficits.
At UNM, that amounts to nearly $4.4 million in debt the athletic department incurred with the main campus over years of overspending. At NMSU, the debt is $3 million.
The budget was not approved by Governor Michelle Lujan Grisham.
Smith said he lobbied for the budget formulation because he was tired of how the two schools handled their financially-struggling athletic departments, which he says are underfunded compared to their peers in their conferences.
“That language strictly says, ‘Hey, UNM main campus and athletic department, it’s still taxpayers’ money and you’re just moving it around. And every year UNM or the state, if they can’t quite make the payments, they advertise (the deficit reduction plan is going to last) for a longer period,” Smith said. in an interview on Friday, “What this language is doing (in this year’s budget), I hope, is just canceling this debt. There was no additional money from the state of New Mexico.”
In UNM’s case, the athletic department had run up a $4.7 million deficit by the end of fiscal 2017, having missed budget eight times in 10 years.
Two years ago, the regents approved a plan for the department to repay the university over a 10-year period, and the athletic department had begun to write off the debt.
Smith said those shortfalls were caused by accounting issues at universities.
One of the main reasons for the shortfalls has been a practice of overstating revenue from ticket sales and other sources, which expenses then exceed.
Smith said he hopes university leaders find a better way to keep athletic department budgets and spending in line. And he again expressed his displeasure with universities scheduling football games against high profile opponents that come with big payouts, low chances of winning and high chances of players getting injured.
Last season, the Aggies lost to Alabama 62-10 and the Lobos lost to Notre Dame 66-14, for example, but every game earned New Mexico schools a big payday.
“I’m sick of both universities having to accept cash games. We’re not competitive and getting crushed, but they have to play those games to get enough money for their athletic departments,” Smith said. .
UNM athletic director Eddie Nuñez said the university is analyzing how the bill would affect the department.
“I can’t talk about the proposal until we understand what it means and how it will work,” he said Friday night.
UNM board chairman Doug Brown also said he hadn’t heard of the debt forgiveness attempt. “I don’t know the details,” he said. But “there are four or five units within the university with deficits”. The governor’s office could not be reached for comment Friday evening.