SANTA FE – Perhaps some positive budget news is finally on the way.
State revenue is on track to exceed projections by roughly $130 million in the fiscal year ending this month, providing hope that New Mexico will have a touch more breathing room when lawmakers begin crafting another budget.
But don’t expect a spending spree.
If the new revenue comes through, it will simply bolster reserves that have been depleted in recent years and help sustain the spending levels already in place – especially important given that “one-time” funding sources have been tapped for the budget in recent years.
The early look at the budget picture came in a staff presentation Monday to the legislative committee that focuses on revenue and tax policy. The new numbers aren’t a formal estimate, just a hint of what’s to come.
Economists working for the Legislature and Gov. Susana Martinez will issue a new revenue estimate in August.
David Abbey, director of the Legislative Finance Committee, told lawmakers Monday that they can expect plenty of pressure to increase spending when they meet in January to work on the next budget. Higher pay for workers may be one request, he said.
The size of the state workforce, for example, fell about 14 percent over a recent eight-year period, by more than 2,900 employees, according to LFC data. There are higher-than-average vacancy rates among state-employed social workers in Child Protective Services, police officers, forensic scientists and nurses.
Abbey also pointed out that a trial underway this summer focuses on whether the state is providing enough funding for schools.
“It’s going to be hard to have enough revenues to make our budget balance,” said Rep. Jim Trujillo, a Santa Fe Democrat and vice chairman of the Revenue Stabilization and Tax Policy Committee.
Sen. William Sharer, R-Farmington, said the state must do more to attract industries that will diversify the economy and generate revenue. He helped secure funding for a tax study that could guide efforts to simplify New Mexico’s tax code and attract new businesses.
“We are addicted to oil and gas in New Mexico,” Sharer said. “When we don’t have oil and gas revenue, we don’t have revenue.”
As for the better-than-expected revenue this year, it’s being driven by oil and gas taxes and gross receipts taxes, a sign of increased economic activity in New Mexico.