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Revenue uptick may ease budget crisis

SANTA FE – A recent bump in New Mexico gross receipts tax collections has eased some legislators’ concerns about a short-term budget crisis, but Gov. Susana Martinez’s administration says it’s too early to tell if the state has emerged from a revenue downturn.

With a special session on tap for next week, Senate Finance Committee Vice Chairman Carlos Cisneros, D-Questa, said the revenue uptick could allow lawmakers to more easily balance next year’s budget.

“We’re not out of the woods, but we’re not in as difficult of a situation as we were in January,” Cisneros told the Journal. “The concern of a shortfall (for this year) is alleviated … and we’re now trying to make sure we don’t find ourselves with a shortfall (next year).”

Preliminary data compiled by the Legislative Finance Committee and shared this week with lawmakers shows general fund revenue levels were roughly $110 million higher than projected through March.

Gross receipts tax collections drove the better-than-expected revenue picture, with GRT receipts more than $40 million above estimated levels, according to the LFC.

Martinez, the state’s two-term Republican governor, has criticized the Democratic-controlled Legislature for not doing more to shore up this year’s budget and relying on tax and fee increases – which she vetoed – to help pay for state government operations in the coming year.

Due to concern over declining cash flows, Martinez last month directed cabinet secretaries in her administration to come up with employee furlough plans.

While the improved revenue picture and cost-savings generated by a state hiring freeze appear to make furloughs unlikely before the new budget year starts July 1, Martinez administration officials have not yet confirmed they will be avoided.

“It continues to be something we’re keeping on the table because we’re not sure what the Legislature is going to do in the special session,” Martinez deputy chief of staff Nick Piatek said Wednesday.

A labor union official said earlier this week his union has received no response since asking State Personnel Director Justin Najaka last month to provide justification for furloughs, which haven’t been used as a cost-saving tool in the state since 2010.

“It’s been radio silence since that point,” said Miles Conway, communications director of the American Federation of State, County and Municipal Employees union in New Mexico.

He also said AFSCME has a “very aggressive defense” prepared in case the Martinez administration does move forward with a furlough plan.