Democratic New Mexican Sen. Martin Heinrich announced Thursday that the U.S. Senate Appropriations Committee passed a bill that allocates $11.8 million for 34 projects in New Mexico. The committee passed the Fiscal Year 2024 Financial Services and General Government Appropriations bill and Commerce, Justice, Science, and Related Agencies Appropriations bill Thursday. It goes next to the full Senate. “As a member of the Senate Appropriations Committee, I’m proud to have the opportunity to directly advocate for the needs of New Mexicans in our annual government funding legislation,” Heinrich said in a news release. “These bills make substantial investments in the resources law enforcement officials and medical providers need to protect the safety and well-being of families across our state, including by removing barriers to life-saving opioid use disorder treatments and providing more tools to combat the flow of illicit fentanyl… This federal funding will also help promote and nurture the talent and potential we have in New Mexico by supporting our local small businesses, arts organizations, non-profits, and cultural institutions—all vital to strengthening our economy and growing our middle class.”
The appropriations include increased funding for Taxpayer Services at the Internal Revenue Service.
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.
If the federal government defaults on its debt for a prolonged period of time, New Mexico could lose up to 37,500 jobs, according to a new report by Moody’s Analytics released May 10. This report details two possible outcomes: should the U.S. default and then correct itself in the immediate aftermath and in the event of a prolonged default.
“We now assign a 10 percent probability to a breach,” the report states. “If there is a breach, it is much more likely to be a short one than a prolonged one. But even a lengthy standoff no longer has a zero probability. What once seemed unimaginable now seems a real threat.”
The expected deadline to prevent default is June 8 although due to the nature of economics, the date is subject to change, the report states.
Two dueling bills in Congress attempt to address the debt ceiling and these actions could include harsh cuts that may affect New Mexicans. One of the bills would eliminate the debt ceiling altogether while the other expands the debt ceiling and imposes deep cuts, including to social programs like food assistance. These proposed cuts in the Limit, Save, Grow Act of 2023, which was proposed by House Speaker Kevin McCarthy, a California Republican, on April 19, include recalling unspent pandemic-related funding, ending President Joe Biden’s student loan forgiveness plan, repealing green tax credits, cutting funding to the IRS and limiting other discretionary spending. The bill’s cuts seek to save taxpayers $45 trillion. “The spending limits are not draconian.
New Mexico’s environmental and oil and gas regulators are facing budget cuts for the next fiscal year, as nine months of the COVID-19 pandemic and a significant downturn in the oil market has depleted the state’s budget.
The budget reductions come after years of attrition in regulatory budgets under the Susana Martinez administration. The New Mexico Environment Department’s budget was cut by 32 percent between fiscal years (FY) 2012 and 2019, which was the last fiscal year budget passed by the legislature in 2018 before Martinez left office, according to a report released by the New Mexico Wilderness Alliance. The Energy, Minerals and Natural Resources Department (EMNRD) saw its budget drop roughly 24 percent under the Martinez administration between fiscal years 2012 and 2019.
In Gov. Michelle Lujan Grisham’s first budget proposal for FY2020, NMED’s general fund increased 6 percent compared to FY2019, while EMNRD saw a 9 percent increase in fiscal year 2020 over 2019. The departments saw similar increases in the FY2021 budget. But some of that progress will be reversed as the state grapples with the fiscal ramifications of a nearly year-long public health emergency and an oil boom bust.
NMED to cut back on some services
NMED submitted a $89.2 million budget request for fiscal year 2022.
Earlier today, we reported about New Mexico’s dipping reserves. In Fiscal Year 2016, the reserve fund was at $146 million, and in Fiscal Year 2017, New Mexico was $67 million in the red. Now, the Legislative Finance Committee has released its revenue forecast for the state. Among the report’s highlights:
Preliminary FY 2017 ending reserve balances are $329 million. Projected FY 2018 ending reserve balances are $206 million.
The House of Representatives passed three pieces of budget legislation Wednesday afternoon and evening with little debate. The first restored funding to higher education and the state Legislature. Earlier this year, Gov. Susana Martinez vetoed the entire budgets for both during the regular session, citing her opposition to tax increases. Two Republicans—state Reps. Jason Harper of Rio Rancho and Rod Montoya of Farmington—voiced concerns for the spending bill.
Albuquerque Mayor Richard Berry’s administration is voicing confidence that $50 million in federal funding will come their way to help finance the Albuquerque Rapid Transit (ART) project. That’s at least what the city’s Chief Operations Officer Michael Riordan said Monday evening at a city council meeting. He mentioned that former President Obama’s fiscal year 2017 budget recommendations include “a $50 million earmark” for the bus rapid transit project and that even though Congress hasn’t approved a budget, the money is still “currently on the legislative docket to be passed.”
ART, now well into construction with torn roads and narrow lanes that hold back traffic in the heart of Central Avenue, is projected to be 10 miles of dedicated lanes in the street for a rapid bus system with 20 stations. The project is slated to be up and running this fall, but it’s drawn controversy among some residents and business owners along the route, who have blamed slow sales on the project’s construction. More controversy came last week when President Donald Trump released his budget recommendations for fiscal year 2018, which freezes all funding for a Federal Transit Administration grant program for local public transportation projects—including ART.
The state Senate’s leading budget hawk challenged Gov. Susana Martinez on Thursday to reverse course and support proposals for raising taxes and fees or watch essential services get slashed even more. Sen. John Arthur Smith said any vetoes Martinez makes at this stage will force legislators to cut the budgets of public schools and health care as they follow the law to pass a balanced budget. “We’re out of places to find additional dollars,” Smith, D-Deming, said during a brief speech on the floor of the Senate. He spoke hours after the House of Representatives approved a $6.08 billion budget and then moved it to the Senate for consideration. The budget crafted by the Democrat-controlled House would increase state revenue by some $250 million with tax and fee increases.
Gov. Susana Martinez announced Tuesday her proposal to balance the state budget, which involves moving $268.5 million from various state agencies. “This is a responsible budget that reduces the size of government while at the same time protects the progress we’ve made in diversifying our economy, reforming our education system, and keeps our communities safe,” Martinez said in a press release. The proposal includes taking $120 million from public education in funds that Martinez’s press release referred to as “slush funds.”
Sen. John Arthur Smith, D-Deming, told NM Political Report that the proposal is a “starting point for negotiation purposes,” but that real discussions will happen in committee meetings once the legislative session begins next week. Smith, a fiscal conservative, also criticized Martinez’s proposed sweep from public schools. “I’m not as harsh on education as she is,” Smith said.