After years of stagnant wages, job loss and poor revenue outlooks, New Mexico finally has some bright economic news.
The latest state revenue tracking report reveals, as of May 2017, New Mexico has taken in $141 million more than May 2016, continuing a positive four-month trend.
We’ve also brought in an additional $121 million in recurring revenue to the general fund over this same period last year, with the state’s gross receipts tax experiencing the largest growth. This is good news.
And our state needs that revenue more than ever. The state’s reserves remain below 1 percent – well below the ideal 10 percent needed to protect against unforeseen budget crises, and many of our state’s departments are operating on a shoestring budget.
Just this past week, the Legislative Finance Committee was told that many of our correctional facilities are experiencing as high as a 33 percent staff vacancy rate, adding risk to inmates, correctional officers and, ultimately, the public’s safety.
When House Democrats regained the majority and walked into the chamber on opening day of this year’s legislative session, they faced the situation that the state was spending more than we were taking in and took immediate action to address our state’s solvency.
House Democrats also requested a study to examine our state’s finances to prove that we did not need to shut down state government to make ends meet. We then had to overcome the governor’s veto, which nearly eliminated higher education (funding) throughout the state. The impact of these political games, especially to higher education, is still reverberating through our economy, and their full impact won’t be completely understood for at least a couple of years.
So why are we seeing an upward trend in revenue?
To put it simply, a strong national economy is lifting up our state and, hopefully, the trend will continue and even increase.
Oil and gas prices have slightly rebounded, but we must diversify our economy to prevent future crises. New Mexico remains on very shaky ground, and there is a lot we must do to responsibly maintain our solvency so we can continue growing and investing back into our state.
This past year, the Legislative Finance Committee, and House Democrats in particular, took the lead in shoring up our state’s solvency by ensuring revenue would meet our expenditures. Recognizing that we can no longer cut our way to prosperity, we proposed $426 million in revenue enhancements such as taxing internet sales and closing corporate loopholes. These revenue enhancements were vetoed by the governor, but that is real money we are leaving on the table, much of it coming from out-of-state corporations like Amazon and Google.
Right now, House Democrats are determined not to repeat what has been done in the past, which has taken away opportunities from students and created large tax giveaways, but to invest in our future by investing in our roads, students, families and communities, so we can build a robust economy with a strong workforce where businesses can thrive.