New Mexico lawmakers are backing slower, sustained growth in government programs with a budget plan
SANTA FE, N.M. — Leading New Mexico lawmakers on Friday recommended a 5.9% increase in general fund spending for the upcoming budget year amid a windfall in oil-related revenues, while also sounding a warning about the future of the state's petroleum bonanza and putting more money aside for savings. and investment accounts.
The proposal from a main budget-writing committee to the Democratic-led Legislature would increase general spending by $566 million to $10.1 billion for the fiscal year running from July 2024 to June 2025. The higher overall spending represents a fraction of the projected $3.5 billion surplus. of state revenues in excess of current tax obligations.
The budget blueprint would strengthen efforts to improve student achievement in public education, support health care for people living in poverty or on the brink as federal support for Medicaid declines in the wake of the pandemic, and raise wages of delivering an average of 4% for state employees, along with compensation increases at public schools and colleges.
Support for children's well-being also features prominently, including a recommendation to increase an early childhood education foundation's spending to expand preschool and nurse home visits for parents of infants and toddlers. The Early Childhood Education Trust was established in 2020 amid an extraordinary increase in oil-related revenues and already includes approximately $6 billion.
Senator George Muñoz of Gallup warned that the state budget is more dependent than ever on revenues from oil and natural gas – a commodity subject to volatile swings in prices and production.
“Ultimately, that is a very dangerous situation,” said Muñoz, chairman of two leading budget-writing committees. “I think this is a very healthy budget. … It ensures that the state of New Mexico can grow in the coming years without massive cuts later.
The Legislature convenes Jan. 16 for a quick, 30-day legislative session focused on budget negotiations. Gov. Michelle Lujan Grisham can veto any budget provisions approved by lawmakers.
Republican Sen. Pat Woods of Grady said he is urging his colleagues in the Democratic majority to be reasonable and slow the pace of recent budget increases.
“Do we even know that what we finance works?” said Woods, one of 14 Republican senators who outnumber Democrats in the House by nearly 2-1. a general idea of where the financing works.”
Under lawmakers' proposal, spending on public schools would increase by $243 million, or 5.8%, to $4.42 billion.
The plan would also significantly increase spending on the state court system, local prosecutors and public defenders amid increased concerns about crime and gun violence in Albuquerque.
State Rep. Derrick Lente of Sandia Pueblo said the budget plan leaves room for $200 million in tax cuts and stimulus checks.
Lujan Grisham used her veto last year to scale back a tax cut package, saying it could undermine future spending on public education, health care and law enforcement. Items vetoed included reduced tax rates on personal income, sales and business transactions. Credits for the purchase of electric vehicles and related charging equipment were also vetoed, but are back on the negotiating table this year.
“We are taking a much more conservative approach to our tax proposal this year,” said Lente, chairman of the House tax leadership committee.
A rival budget proposal from Lujan Grisham would dramatically increase general spending by about $950 million, or nearly 10%, to $10.5 billion, with major initiatives to strengthen homeownership and affordable housing options.
Both budget proposals signal a likely end to three straight years of large-scale state cash transfers to New Mexico households. The most recent rebates in 2023 exceeded $600 million in individual $500 payments.