A key legislative budget committee has unveiled a $6.3 billion spending plan for the coming year that includes a pay raise for many New Mexico teachers, though top-ranking lawmakers warned a drop in oil prices may cause the plan to have to be scaled back.
In its current form, the budget recommendation calls for state spending to be increased by $140.4 million in the coming year, a 2.3 percent increase over current spending levels.
In addition to more money for teacher pay in each level of the state’s three-tiered system, other significant proposed spending increases include more dollars for early childhood programs and a $9.5 million increase for the Children, Youth and Families Department.
“Whatever the money (level) is, we’re looking at prioritizing,” said Rep. Larry Larranaga, R-Albuquerque, a member of the Legislative Finance Committee.
The ongoing drop in oil prices has already caused a sizable decrease in the amount of “new” money projected to be available for lawmakers to spend in the coming year — from $285 million in August to roughly $141 million as of last month.
Sen. John Arthur Smith, D-Deming, said the volatility in energy prices — taxes and royalties on the energy industry make up nearly 20 percent of the revenue that flows directly into the state’s general fund — could lead to the LFC budget plan being pared back by as much as $70 million.
“I’m somewhat apprehensive about that,” Smith said. “We want to be prepared rather than sorry.”
However, Smith also said he’s hopeful the low gasoline prices will lead to more economic activity, as New Mexico residents spend money they’ve saved at the pump elsewhere.
Gov. Susana Martinez is expected to unveil her own budget recommendation in the coming days. The 60-day New Mexico legislative session begins Jan. 20.
Check tomorrow’s Journal for more details.