Between committee meetings discussing bills about guns, license tags and cannabis law updates, lies the main reason for the session: the state budget.
“This budget… represents by significant factor the largest investments before the Senate has had a chance to do their action during session in areas like housing and infrastructure, the largest healthcare investment that we’ve ever done as a legislature,” HAFC Chairman Rep. Nathan Small, D-Las Cruces, said. “I think in the numbers, this really goes to a huge opportunity and challenge that we have.”
Rep. Cathrynn Brown, R-Carlsbad, Rep. Rod Montoya, R-Farmington, and Rep. Randall Pettigrew, R-Lovington voted against the bills.
The Fiscal Year 2025 New Mexico budget has $10.18 billion available for appropriations. The appropriations involve HB 2, HB 3 and HB 1, the Feed Bill, which funds the legislature through the session.
The bills show how state funds would be allocated for FY 25 which begins July 1.
The budget results in reserves at 32 percent of spending.
“With hundreds of millions of one-time dollars available from the reserves, the recommendation continues efforts to create and grow endowments before expanding agency recurring base budgets, including a new endowment for higher education that, along with existing endowments for early childhood and public education, completes a ‘cradle to career’ system of investments,” the Legislative Finance Committee’s recommendations and highlights report states. “In addition, efforts to ‘re-fund future year’s spending needs include ‘expendable trusts’ that provide appropriations over multiple years, like those being used to support child welfare and workforce development services.”
The expendable trusts are funds outside of budget reserves set aside for future funding needs as well as ensuring that reserves are maintained, like a rainy day fund.
State natural resources departments are expected to get a windfall for FY 25.
“Everything from increasing staffing and regulatory capacity for overseeing the oil and gas industry, to fighting fires to expanding staffing and funding for operation of our state parks around the state,” LFC Director Charles Sallee said. “Increases in monitoring funding for the environment department’s budget, significant investments in their staffing, and their overall general fund budget grow about 90 percent. Those increases should allow for greater effectiveness in their regulatory response.”
Although the state budget is doing well, the LFC requests that the state begin decelerating to save for less abundant years, according to a report from the committee.
New Mexico’s energy market is currently strong, but its volatile nature drives state revenues in a way that could cause a sudden drop in revenues.
The legislature passed a bill during last year’s legislative session , SB 26, that transfers excess oil and gas revenues to the severance tax permanent fund beginning in FY 25.
This would mean an increase in severance tax fund payments to the general fund.
The budget bills now head to the House floor for debate.