The New Mexico economy, as of May 23, is doing well. It is going so well that state economists raised revenue estimates in the two fiscal years leading up to this year’s legislative session.
That’s what the Legislative Finance Committee post-session report released on Tuesday said.
“Recurring revenues for [Fiscal Year 2023] were estimated at almost $10.8 billion in the December 2022 estimate, up $928 million from the August estimate and up $1.7 billion from estimates a year earlier. Fiscal year 24 recurring revenues were estimated at almost $12 billion,” the report stated.
Projected recurring revenues were estimated at nearly $3.6 billion, 42.7 percent growth over the previous year, for FY 24 which begins on July 1.
During the legislative session, lawmakers increased those recurring budgets by nearly 14 percent to $9.57 billion in FY 24 in the state budget.
“The act first prioritizes historic human capital investments, from cradle to career, including expanding access to infant and toddler childcare and parent-support home visits, early childhood pre-kindergarten education, extended learning time in public schools, and higher education through free tuition and expanded financial aid,” the report said. “The GAA funds and expands programs known to improve the lives of New Mexicans, efforts to improve service levels, and improved compensation for public education and state government workers to keep salaries competitive and help with the recruitment and retention of quality public servants.”
Child Protective Services received funding to fill hundreds of new and existing social worker positions as well as funding for “evidence-based programs to modernize the state’s child welfare system,” according to the report.
The budget also included Medicaid rate increases, mostly for infant and maternal health, behavioral health and physician services, the report states.
The budget also left revenue for one-time tax rebates and vetoed tax code changes.
Prior to Gov. Michelle Lujan Grisham’s vetoes in the 2023 tax package would have cut $1.138 billion in recurring revenues and $673 million in nonrecurring revenues through a series of tax changes including $500 million in gross receipts tax rate cuts by FY27, $678 million for income tax rebates and $7 million in revenue gains to create a flat corporate income tax.
“FY24 reserve balances are projected to end the fiscal year at 37.1 percent of recurring appropriations after governor vetoes, including a substantial amount vetoed from the tax package,” the report said.