That could allow for a salary increase for state employees, who have received just one pay hike in the past five years, a legislative fiscal leader said.
However, a top-ranking budget official in Gov. Susana Martinez’s administration cautioned lawmakers that some of the newly available money will likely be claimed for existing commitments.
“It sounds like a very robust figure, but when you look at all the demands on the new money, there’s not a lot of room for expanding current spending,” Finance and Administration Secretary Tom Clifford told members of the Legislative Finance Committee during a Monday hearing at the Capitol.
A pending increase in state pension payments, the cost of a lawsuit over back pay for state employees and a financial crunch facing the state’s lottery scholarship program are all likely to eat into the $293 million, Clifford said.
But Senate Finance Committee Chairman John Arthur Smith, D-Deming, said there should be enough money available to provide state workers and teachers, with a pay increase in the coming year.
Most state employees received a 1 percent salary hike this year, but workers have said the increase was largely offset by higher health insurance premiums.
“We’re hoping to be able to do things we haven’t been able to do in recent years,” Smith told the Journal.
New money represents the difference between projected state revenue in the coming budget year and current state spending. In dollar amounts, New Mexico is projected to collect nearly $6.2 billion in the coming fiscal year, a figure that would mark the state’s largest revenue intake since 2008.
Both the Martinez administration and the Legislature will roll out their own budget proposals for the coming year soon, before lawmakers gather in Santa Fe next month for the start of the legislative session.
The Martinez administration wants to limit state spending growth to about 4 percent, Clifford said. That would mean spending only about $240 million of the projected new funds, with the rest of the money set aside for emergencies.
The governor already has proposed health care workforce initiatives and is expected to push for several existing tax incentives to be modified.
In addition, Martinez told reporters Monday that she sees health care, water projects and education as key budget areas for the coming budget year. Spending on K-12 public schools makes up about 44 percent of the state budget.
“I think we have done some good things, there has been some growth, but there’s still a lot to be done,” the first-term Republican governor said.
Meanwhile, the revenue forecast released Monday also showed the state is on track to take in roughly $84 million more than previously estimated in the current budget year, which ends in June.
Economists from the legislative and executive branches work together to come up with the revenue estimates, which are released three or four times per year.
Journal staff writer Deborah Baker contributed to this report.