Six months before the next legislative session is not too soon for N.M. lawmakers to commit to adjusting their spending habits.
The temptation will be great to build more recurring expenses into an operating budget that just ballooned by 14% over the previous year’s. That’s because many of the perverse forces that led to a revenue bonanza — and a record $8.5 billion budget for the fiscal year that starts in July — are still swelling state coffers.
Revenue projections for the current budget year are now tracking at more than $440 million higher than projected in December due to a combination of factors. One is an ongoing surge in oil production. That won’t last forever, so lawmakers can’t act as if oil will always be there to prop up unsustainable spending.
A larger-than-expected increase in statewide wages and employment levels has also boosted personal income tax revenue. While that’s good news, it’s also a bounceback from pandemic stress, not a bankable trend. Meanwhile gross receipts tax collections are tracking $248 million higher than expected four months ago. Of course, the rising cost of goods and services fueled by inflation is a big reason why.
New Mexico’s revenue super haul — which includes more than $26 billion in federal pandemic relief funds — could allow for even more spending infusions in the coming year if current trends hold.
“It feels like we’re in a position where we really have an opportunity to make significant investments right now,” said Senate Majority Leader Peter Wirth, D-Santa Fe. “This is an opportunity that in the 18 years I’ve been here, I’ve never seen before.”
Wirth is not wrong — if he means investing in real infrastructure. It’s time for New Mexico’s lawmakers to parlay a strong financial position into a series of one-time investments in roads, bridges, highways, broadband access — and most importantly water — that can grow the economy enough to reduce our dependence on oil and gas revenues.
Let’s think big
Let’s start with water. The Middle Rio Grande Conservancy District, which manages irrigation from Cochiti Dam to Bosque del Apache, warned farmers last week the agency could be out of water in two or three weeks unless the region receives rain.
On top of limited water, aging infrastructure has put Corrales farmers in a bad spot.
Last year, district crews found a sinkhole above the Corrales siphon. A 1,200-foot-long pipe, built during the FDR administration, runs underneath the Rio Grande and uses gravity to move water to lands west of the river. Crews then found a hole in the siphon but couldn’t drain water adequately to fix it. Instead, they brought in two diesel-powered pumps to convey water into the main Corrales channel. But, for a variety of reasons they can’t leave the pumps on indefinitely, so crops and orchards are imperiled. A long-term fix likely necessitates state funding. But that’s just one spot on a river that’s already so low, irrigation may not be possible if rains don’t boost flows.
State spending can’t fix a drought, but it can ensure every drop of water is delivered as efficiently as possible.
The Infrastructure Investment and Jobs Act will funnel a total $3.7 billion to the state over the next five years for infrastructure, airport, broadband and water projects. The federal goal is to deliver clean drinking water to every American and eliminate service lines and pipes made of lead. That should help New Mexico ensure every New Mexico finally has access to clean water, particularly on the Navajo Nation. But can the $355 million for water infrastructure also tackle a supply problem?
Why not take a page from gubernatorial candidate Greg Zanetti’s campaign playbook? He calls New Mexico the “Saudia Arabia of brackish water” in reference to its billions of acre feet of subsurface water that is saltier than fresh water.
Water desalination facilities powered by small-modular nuclear reactors would provide both high and low-tech jobs, but also take pressure off over-appropriated rivers and impoundments, ensuring more water in the system for wildlife habitat, downstream compact obligations and agriculture. If El Paso and San Antonio, Texas, can do desalinization, why can’t we?
Until the drought ends, we’re picking winners and losers by how we distribute water. So far the big losers are small farmers — which makes anyone who appreciates locally sourced food a loser as well.
In the same vein
There are plenty of other examples where one-time expenditures can set the table for long-term success. If we’re truly concerned about diversifying the economy, we need to have ubiquitous broadband. How many businesses have passed on locating here because of the lack of connectivity? The federal infrastructure money will help, yes, and whatever it pays for frees up N.M.’s “windfall” to go toward thoughtful, targeted investments.
As much as we support competitive teacher salaries, we also must acknowledge the importance of our children’s learning environment. Our kids shouldn’t have to sweat it out in 90-degree-plus classrooms, especially if we extend the school year into summer months.
Legislative Finance Committee Director David Abbey has already said lawmakers should consider setting aside much of the new money in endowment funds for college scholarships or other purposes. Ensuring the Lottery and Opportunity scholarships are promises kept is essential, especially because the jobs needed to truly expand the economy require higher learning.
There’s plenty of debate to be had, but the undeniable truth is our state has a once-in-a-lifetime opportunity to invest in itself and its hardscape in a manner that lasts decades, if not generations.
Lawmakers, please think big.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.