Projections show decline in state revenue

During September’s special legislative session, lawmakers agreed on fixes that added about $23 million in revenue. That was a start, but not nearly enough to solve the state’s budget crisis. On Wednesday, state legislators received little good news about the state’s revenue stream during a committee meeting. Even with that help, New Mexico’s bean counters […]

Projections show decline in state revenue

During September’s special legislative session, lawmakers agreed on fixes that added about $23 million in revenue. That was a start, but not nearly enough to solve the state’s budget crisis.

On Wednesday, state legislators received little good news about the state’s revenue stream during a committee meeting.

Even with that help, New Mexico’s bean counters dropped their revenue projections for the current fiscal year from previous estimates by more than $130 million. The state’s current fiscal year began in July and ends next June.

And things don’t look much better for the following fiscal year, which runs from July 2017 to June 2018. State officials have now dropped revenue estimates for that period by another $127 million.

“We clearly need to make significant changes to how we administer taxes in this state,” state Rep. Jason Harper, R-Rio Rancho and chair of the Revenue Stabilization and Tax Policy Committee, said at a committee meeting in response to the new projections.

The lowered revenue estimates, which come from the state’s Consensus Revenue Estimating Group, come at a time when the state is facing a current budget shortfall of $69 million. Projections for next year’s state budget have not yet been made, but another large budget deficit is expected.

State officials have blamed low oil and gas prices for New Mexico’s recent budget shortfall. They also pointed fingers toward the healthcare industry, which is one of New Mexico’s biggest employers, but remains, one state official said “largely untaxed.”

New Mexico’s unemployment rate of 6.7 percent, one of the highest in the nation, also doesn’t help.

“New Mexicans are working fewer and fewer hours,” Frank Crociata, director of tax policy at the state Taxation and Revenue Department, said while presenting the numbers. That means fewer people paying into the state tax system.

Mining jobs continue to decline, as do jobs in lodging, according to U.S. Bureau of Labor Statistics data.

Overall, the October employment numbers for New Mexico were down 0.3 percent from one year ago, according to numbers from the state Workforce Solutions Department. That marks a 2,900 fewer jobs across the state then exactly one year before

One presenter at the committee meeting spoke of an apparent silver lining: Forecasters don’t see a recession coming anytime soon.

“We are in one of the largest expansion periods in history,” Jon Clark, an economist with the Legislative Finance Committee, said at the hearing.

He was referring to the months of consecutive overall nationwide job growth that, albeit small and sluggishly, has occurred since early 2010. New Mexico has fared worse than most states with slower job growth and hasn’t fully recovered from the recession.

Historically, this means that a recession should be coming soon. But economic forecasters with IHS Global Insight, which the state uses for projections, see “no signs of an overheating economy or substantial impending shocks,” according to the latest written state Consensus Revenue Estimate.

Yet Michael O’Donnell, a research scientist at the University of New Mexico Bureau of Business and Economic Research, told NM Political Report last week IHS economists did not include a so-called “Trump factor” into their recent forecasts.

President-elect Donald Trump’s ambiguous proposals to overhaul the country’s international trade policies, for example, amount to what O’Donnell called “a high degree of uncertainty” in the state’s economic future.

The state’s general fund reserves, which lawmakers often tap when faced with budget difficulties, are also in bad shape. General fund reserves, which act as kind of a savings  account for the state, are in the red at negative-1 percent of recurring, or sustainable, appropriations that the state makes every year to fund things like highways and schools.

Generally, lawmakers try to keep reserves at 10 percent of state spending each year.

In total, the state is estimated to bring in  $5.6 billion during the current fiscal year while estimates for the next fiscal year total $5.9 billion in revenue.

Harper is expected to present ideas for overhauling New Mexico’s gross receipts tax code to help the revenue problems to the same committee on Friday.

We're ad free

That means that we rely on support from readers like you. Help us keep reporting on the most important New Mexico Stories by donating today.

Related

Emily’s List endorses seven candidates for Legislature

Emily’s List endorses seven candidates for Legislature

Emily’s List, a nonprofit that supports women candidates and reproductive rights, endorsed seven incumbents facing general election opponents in New Mexico legislative elections. All…
Equality New Mexico endorses 15 legislative candidates

Equality New Mexico endorses 15 legislative candidates

A New Mexico-based LGBTQ rights organization endorsed 15 candidates for state House and Senate seats for the 2024 elections.  Marshall Martinez, executive director of…
Lujan Grisham pocket vetoes two bills

Lujan Grisham pocket vetoes two bills

Gov. Michelle Lujan Grisham pocket vetoed two bills the legislature passed this legislative session: one changing the Cybersecurity Act and the other concerning law…
BLM announces final methane waste rule

BLM announces final methane waste rule

The federal Bureau of Land Management announced its final methane waste rule on Wednesday. These new regulations clamp down on the practice of venting…
What consumers, farmers should know about the flu impacting dairy cows

What consumers, farmers should know about the flu impacting dairy cows

Migrating birds appear to have caused a virus in dairy cattle that is causing reduced milk production. So far, the disease, which initially started…
Republicans seek to limit national monument designations

Republicans seek to limit national monument designations

Republican-backed legislation in the U.S. Congress would make it harder for the government to designate new national monuments. The proposed Congressional Oversight of the…
Amid new graduation requirements, what do high schoolers want to learn?

Amid new graduation requirements, what do high schoolers want to learn?

By Margaret O’Hara, The Santa Fe New Mexican The main things that bring Brayan Chavez to school every day: Seeing, talking to and engaging with…
Special ed teachers hope lawmakers OK pay raises, admin changes

Special ed teachers hope lawmakers OK pay raises, admin changes

By Margaret O’Hara, The Santa Fe New Mexican Brittany Behenna Griffith has a laundry list of adjectives to describe the ideal special education teacher:…
Lawmakers must find consensus on competing education spending plans

Lawmakers must find consensus on competing education spending plans

By Margaret O’Hara, The Santa Fe New Mexican A challenging task awaits New Mexico lawmakers in the next 30 days: Reconciling three very different…
Health workers fear it’s profits before protection as CDC revisits airborne transmission

Health workers fear it’s profits before protection as CDC revisits airborne transmission

Amy Maxmen, KFF Health News Four years after hospitals in New York City overflowed with covid-19 patients, emergency physician Sonya Stokes remains shaken by…
Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Lujan Grisham, Biden admin announce $10 million in federal funds for tribes, pueblos

Gov. Michelle Lujan Grisham announced Friday $10 million in funding from the federal American Rescue Plan Act was awarded to six tribal nations and…
Proposal to curb executive powers moves to House Judiciary

Proposal to curb executive powers moves to House Judiciary

The House Government, Elections and Indian Affairs Committee discussed a potential constitutional amendment that seeks to limit the governor’s executive powers. The committee approved…
Senators introduce legislation to aid abortion providers

Senators introduce legislation to aid abortion providers

Sen. Martin Heinrih and other Senate colleagues introduced abortion rights legislation into the U.S. Senate on Thursday. The Abortion Care Capacity Enhancement and Support…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…
At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

At stake in mifepristone case: Abortion, FDA’s authority, and return to 1873 obscenity law

Lawyers from the conservative Christian group that won the case to overturn Roe v. Wade are returning to the U.S. Supreme Court on Tuesday in pursuit…
Senators introduce legislation to aid abortion providers

Senators introduce legislation to aid abortion providers

Sen. Martin Heinrih and other Senate colleagues introduced abortion rights legislation into the U.S. Senate on Thursday. The Abortion Care Capacity Enhancement and Support…
New Mexico Medicaid to cover cost of over-the-counter oral contraception

New Mexico Medicaid to cover cost of over-the-counter oral contraception

New Mexico Medicaid announced on Wednesday that it will cover the cost of Opill, the first oral contraception approved for over-the-counter use. It is…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…
San Juan County, Navajo Nation settle redistricting case

San Juan County, Navajo Nation settle redistricting case

The Navajo Nation and San Juan County reached an agreement Monday about commission districts after the tribe alleged that its members were not adequately…
MIT ranks NM elections most well-run in the U.S.

MIT ranks NM elections most well-run in the U.S.

New Mexico’s 2022 election was ranked most well-run in the country by Massachusetts Institute of Technology’s Election Data and Science Lab’s Elections Performance Index.…
Emily’s List endorses seven candidates for Legislature

Emily’s List endorses seven candidates for Legislature

Emily’s List, a nonprofit that supports women candidates and reproductive rights, endorsed seven incumbents facing general election opponents in New Mexico legislative elections. All…
Ex-GOP candidate allegedly hired people to kill witnesses in shootings of homes of Democratix politicians

Ex-GOP candidate allegedly hired people to kill witnesses in shootings of homes of Democratix politicians

Republican failed state house candidate Solomon Peña is facing more federal charges, this time on a murder-for-hire scheme.  Peña allegedly tried to hire two…
BLM announces final methane waste rule

BLM announces final methane waste rule

The federal Bureau of Land Management announced its final methane waste rule on Wednesday. These new regulations clamp down on the practice of venting…
U.S. Supreme Court hears case to restrict access to medication abortion

U.S. Supreme Court hears case to restrict access to medication abortion

The U.S. Supreme Court heard the case about the regulations around mifepristone, one of a two-step regime for abortion medication, on Tuesday. FDA v.…

GET INVOLVED

© 2023 New Mexico Political Report