SANTA FE, N.M. — New Mexico’s strategy for spending and investing a multibillion-dollar annual surplus closely tied to oil production came into sharper focus Saturday, as a legislative panel advanced an annual spending plan toward a vote in the House. Senate.
Lawmakers are kicking the bucket on recent double-digit budget increases in the nation’s second-largest state in oil production behind Texas, while setting aside money in grants and investment accounts to secure funding for critical programs in the future — just in case the world hungers for oil weakens.
After an 11-0 vote in committee, the amended budget proposal would increase the state’s annual general spending by about 6.8% to $10.2 billion for the fiscal year running from July 2024 through June 2025.
Proposed Senate changes add $32 million to the spending package, setting average salary increases for government employees and staff at K-12 schools, state colleges and public universities at 3%.
New Mexico Governor Michelle Lujan Grisham has called for a more robust spending package, a 10% annual spending increase that would strengthen housing options, children’s literacy and access to health care.
The New Mexico Legislature is putting together its own budget — a bill that currently includes the governor’s request for $30 million to create a literacy institute and strengthen reading programs, along with $125 million in new funding for housing projects.
Sen. George Muñoz of Gallup, chairman of the Senate’s leading budget committee, said the budget plan slows spending growth and still funnels more money to rural hospitals, the new literacy institute, state police salaries, the safety net program for seniors and increased spending on highways to overcome inflationary construction costs.
A monthly payment of $25 to impoverished seniors and disabled people from the Supplemental Nutrition Assistance Program would amount to $100, he said.
“You can walk away at the end of the day and say we helped the poor, we helped the seniors, we helped law enforcement, you solved a lot of things,” Muñoz said.
Lawmakers also want to help state and local governments compete for a larger share of federal infrastructure spending from the Inflation Reduction Act, the Biden administration’s signature climate, health care and tax package. Senate budget amendments apply $75 million in state funds to the effort.
An additional $1.5 million in the budget would, for the first time, help New Mexico compensate landowners and agricultural producers when wolves are confirmed to have killed livestock or working animals.
Conflict between wolves and livestock has been a major challenge in reintroducing endangered Mexican gray wolves to the Southwest over the past two decades. Ranchers say livestock killing by wolves remains a threat to their livelihoods, despite efforts by wildlife managers to drive the wolves away and compensate for some of the losses.
In addition, a conservation fund established in 2023 would receive a new infusion of $300 million. The fund underwrites a range of conservation programs at state natural resource agencies, from agricultural soil improvement programs to the conservation of endangered and threatened species.
Leading Democratic lawmakers also say they want to ensure that new initiatives at agencies overseen by the governor are cost-effective and responsive — especially when it comes to public education, foster care and child protective services — before future funding is guaranteed.
The state House on Friday approved the creation of the “Government Results and Opportunities” trust that would underwrite pilot programs over a three-year vetting period, with requirements for annual reports to the Legislature’s Accountability and Budget Office. The Legislature’s budget bill would place $512 million in the trust.
“It gives us funding for several years to solve problems,” said Rep. Nathan Small of Las Cruces, co-sponsor of the initiative. “It gives us the opportunity to quickly analyze whether or not that works, and how.”
Lawmakers have until Thursday afternoon to deliver a budget to the governor, who can veto any spending items.