New Mexico’s income projections are like a roller coaster: sometimes they’re up, and sometimes they’re down.
Now, they’re on their feet again. But this time they are manner, manner up.
The state is forecasting a windfall of nearly $ 1.4 billion for next budget year, which lawmaker has called a “generational opportunity” to make long-term investments in the state.
Recurring revenue for fiscal 2023 is expected to reach a record high of $ 8.8 billion, with nearly 1.4 billion in “new funds” available for spending growth, according to the budget forecast presented to the Committee on Friday. legislative finances.
“We’re going to think big,” said Senator George Muñoz, D-Gallup.
“We are not going to pull our little cart anymore,” he said. “We’re going to load up our armored trucks, and we’re going to develop and grow New Mexico.”
Dawn Iglesias, chief economist for the Legislative Finance Committee, said expected growth in gross receipts and personal income taxes, as well as rebounding oil and gas markets, are fueling much of the ‘increase in new money, which is the difference between the current budget and expected income over the next fiscal year.
“That difference – $ 1.4 billion – is what we’re saying is new money that could be reallocated or could be allocated to recurring budgets,” she said.
Nora Meyers Sackett, press secretary to Governor Michelle Lujan Grisham, wrote in an email that the governor’s office has held preliminary budget meetings on an agency-by-agency basis in recent weeks. Official budget recommendations will be completed later this fall.
While the process is underway, “I can tell you that the governor’s budget priorities have been clear throughout his tenure and are unlikely to change: public education, economic development (and recovery), protection of environment and crime and criminal justice reform, ”Sackett wrote. . “It is within this framework that we will continue to focus our efforts to respond and invest in the areas of greatest concern to New Mexicans. “
Lujan Grisham is “incredibly optimistic” about the latest revenue projection, Sackett wrote.
“This underscores and validates the sound financial management of his administration, which has, despite the unprecedented events of the past 18+ months, put New Mexico in its best financial position in over a decade,” he said. she writes.
Revenue for fiscal 2022 is estimated at $ 8.1 billion, up $ 632.8 million from the February forecast.
Revenue for fiscal 2021 is expected to be just over $ 8 billion, an increase of $ 185 million, or 2.4%, from fiscal 2020.
“Revenues are up $ 851.3 million from the February 2021 estimate, mainly due to higher than expected gross revenue and income tax collections that accompanied the ‘increased consumer spending and employment growth at high and middle wages in the first half of 2021,’ according to a report to the Legislative Finance Committee. “In addition, the strong recovery in the oil and gas markets is pushing severance packages and federal royalty collections well above their five-year averages, leading to significant transfers to the new early childhood trust fund. . “
Representative Patty Lundstrom, a Democrat from Gallup and chair of the committee, called the projected $ 1.4 billion revenue increase “very good” news.
“We did a projection last January and what we saw was that we weren’t going to see such a rapid recovery with oil and gas, so we weren’t so optimistic,” he said. she declared. “I would rather have this kind of news, you know, that we were wrong and that we got more funding. “
Oil prices have increased since the start of the year as COVID-19 vaccines became available and trade restrictions were lifted, which has bolstered demand for fuel, according to the legislative report.
“To date, New Mexico is the only oil-producing state to have exceeded pre-pandemic production levels,” the report said. “New Mexico’s natural gas production has also accelerated.
The projected increase in revenue next year means New Mexico will have additional resources to devote to needed programs, Lundstrom said.
“What worries me a bit has been a bit bitter for me is things like our retirement programs,” she said. “These retirement programs need help.
Lundstrom said the additional revenue could allow the state to restore programs and services that had been cut back during lean times.
But the money would also allow the state to make new investments.
“Now that the economy has changed so much into a virtual way of life, we need to make sure we have the equipment in place to make sure it’s done right,” she said. “We hear a lot about telemedicine. We all know about distance education and things like that, but I just think it would really help rural areas if we could have a better connection with things like medicine. “
Lundstrom also said it would like to consider investing in research and development, including hydrogen as a new alternative energy, as well as salary adjustments for state government employees.
“It hasn’t been good in a lot of situations,” she said. “We at least want to have a living wage for the people, for god’s sake.”
Lundstrom said the projected revenue growth “opens the door to a number of possibilities.”
“I hope my colleagues will agree that the economy is going to be a big chunk of this,” she said. “We just need to make sure we’re focused on strengthening the economy and helping people who need help. “