Lujan Grisham recommends $10.5 billion budget for fiscal year

SANTA FE — Gov. Michelle Lujan Grisham is recommending the state capitalize on “record revenues” with $10.5 billion in recurring funds and $2.1 billion in one-time, nonrecurring cash infusions for the upcoming fiscal year budget, it was announced Thursday.

Public education consumes the biggest slice of funding. Some $4.5 billion, a 7% budget increase from last year, would go to summer and after-school programs, literacy programs and a new Structured Literacy Institute, among other programs.

Teachers, and all other state employees, would see a 3% raise. State Police officers would enjoy a larger raise of 14%; corrections, probation and parole officers would net an approximately 7% raise.

The $10.5 billion in spending would mark a 9.9% increase from the current fiscal year.

“Here’s my promise to New Mexicans today: I will continue to push for programs, services and solutions that work,” Lujan Grisham said in a statement. “Here’s my promise to New Mexicans in future years and future generations: We will continue to spend within our means, responsibly and with an eye toward accountability, always, while capitalizing on the fiscal opportunities available.”

Lujan Grisham’s proposed budget includes provisions to keep more than a third of state revenues in reserve, in case of revenue shortfalls in the future. The New Mexico Constitution requires a balanced budget; but during the 2008 recession and an oil bust in the early 2010s, reserves proved insufficient to cover the losses.

Oil and gas still dominates state revenues, according to a New Mexico Department of Finance and Administration report, and is expected to make up almost 40% of the expected $13.05 billion in general fund revenues for the next fiscal year.

Revenues are still high in the state, but Department of Finance and Administration Secretary Wayne Propst acknowledged that growth is expected to slow.

“We’re fully aware that growth is projected to slow in future fiscal years, but the state is in a unique position to continue to make smart investments now, while maintaining historically high reserves. …” Probst said in a statement. “It’s also important to note that as we improve health outcomes, lift families out of poverty and bolster the state’s economy, costs for programs and services go down.”

That doesn’t mean Lujan Grisham’s budget has neglected clean energy. Some $20 million would be made available as low-interest loans to communities for projects that reduce carbon emissions, and $30 million would head to improving electric vehicle infrastructure in the state. The Governor’s Office staff also said it is also pursuing incentives for the purchase of electric vehicles or plug-in hybrids to bolster new clean cars requirements adopted by the state.

But Larry Behrens, the communications director for Power the Future, a group that advocates for energy worker interests, wanted more from the “massive” budget recommendation.

“With a massive amount of new money delivered from the state’s oil and natural gas workers, Governor Lujan Grisham has another opportunity to give some of that money to families through rebates,” Behrens said in a statement. “New Mexicans are paying 17 percent more for everything over the last three years and deserve to share in the state’s oil and gas revenue windfall.”

Other budget items included:

• $250 million for the New Mexico Housing Trust Fund;
• $250 million to increase funding for affordable housing, down-payment assistance and structure rehabilitation for homeowners;
• $500 million for the Strategic Water Supply program, which Lujan Grisham announced during a December trip to Dubai. It treats water for use in renewable energy production;
• $250 million for the Land of Enchantment Conservation Fund.

Friday afternoon, the Legislative Finance Committee — the committee that makes budget recommendations to the Legislature — will announce its own budget proposal.

The 2024 legislative session begins Jan. 16.