State economists estimate that the Fiscal Year 2025 revenues will be $13.051 billion, which is up from the December estimate. The interim Legislative Finance Committee discussed the budget update during its August meeting in Las Vegas on Aug. 23. The budget forecast is particularly good in part due to legislation passed during this year’s legislative session. SB 26 increases the severance tax payment fund distributions to the general fund.
While the state created its first ever dedicated recurring fund for conservation projects during the last legislative session, Brittany Fallon, a member of the Land of Enchantment Legacy Fund Conservation Coalition, said more money is needed to prevent the fund from running out of money in fiscal year 2029. “It’s really important that we get the investment account, the permanent fund to $350 million before then or the Legacy Fund will have no more funding,” Fallon said. Fallon spoke to the interim Legislative Finance Committee on Wednesday. The coalition consists of 37 organizations across the state that represent a variety of interests including conservation, agriculture, acequias, recreation, tribes and even fossil fuels. Fallon is a policy manager for Western Resource Advocates, a member of the coalition.
“Until this bill passed, New Mexico was the only interior West state that did not have a dedicated source of funding and now we do,” she said.
The Legislative Finance Committee unanimously chose longtime staffer Charles Sallee as the new director. Sallee will head the team that helps legislators craft the annual budget.
LFC Chair George Muñoz, D-Gallup, said during brief remarks on Thursday that “this process really sets the state up in how and what direction we’re going to head, especially with our revenues.”
The staff of the committee, led by the director, supports the committee’s development of the annual budget recommendation. The director and staff provides oversight of state agency operations. The director manages a staff of 40 fiscal analysts, economists, and program evaluators in the development of reports on agency management, policy issues, and the fiscal impact of proposed legislation, according to a news release.
Members of both parties made statements applauding Sallee as the new director. Muñoz said in a statement that “the committee congratulates Charles on being chosen for this important post.”
“It’s been 26 years since the committee has hired a new director and we needed to find someone who could manage fiscal policy with the best interests of 2 million New Mexicans at the forefront.
Legislative allocations for the Early Childhood Education and Care Department’s home visiting program have increased, but family participation remains low, a new legislative report found. The Legislative Finance Committee held an interim hearing last week to hear the findings on the ECECD’s home visiting program. Home visiting in the state is expected to generate a return on investment ranging from $1 to $14 on every public dollar spent. Home visiting has expanded with funding increases by 216 percent since Fiscal Year 2017. But, the report found most eligible children remain unserved and families that do enroll in the program have a high dropout rate, with only 11 percent of families completing the two-year program.
As New Mexico prepares for a transition away from fossil fuels, officials told the Legislative Finance Committee there may be moderate financial gains in the near future. The state is expected to have moderate gains in the next 25 years, yet the oil and gas industry is expected to peak and decline. Department of Finance Chief Economist Leonard Delgado discussed the state economy’s long-term outlook in one of the presentations. The outlook said U.S. oil production is expected to peak between 2028 and 2033 followed by a decline
The decline of oil production comes during a slow global transition to electric vehicles. The U.S. has been slower than other nations to transition to electric vehicles.
Steps are underway to demolish the San Juan Generating Station in northwest New Mexico. The coal-fired power plant closed last year and Laura Sanchez, executive director of government and public affairs for the Public Service Company of New Mexico, says the utility recently identified a demolition contractor who will oversee the work.
Sanchez presented details to the Legislative Finance Committee on Tuesday about the power plant and the projects that are underway to replace the electricity the state’s largest utility received from it. Now that a contractor has been identified, the process of demolishing the plant can begin, she said. PNM expects that the coal stacks will be demolished in 2024. It will take another year to complete the demolition.
Elephant Butte Irrigation District Manager Gary Esslinger showed legislators a graph on Tuesday depicting the amount of water released and stored in Elephant Butte Reservoir over the decades. “The graph that you see here is what is represented as a hydrographic, hydrologic history of the (Rio Grande) Project,” he said. “You can also call it a climate change pattern. You can also call it a living water testimony. I call it my career.”
The graph shows periods of drought in the Lower Rio Grande Valley during times like the 1950s, when Esslinger was a child living on a farm in the valley.
On July 1, a constitutional amendment to increase the distribution from the Land Grant Permanent Fund t toward educating the state’s youngest children goes into effect. The amendment, approved by voters last fall, would draw an additional 1.25 percent from the fund. Along with money from the state’s general fund, the Early Childhood Education and Care Department will receive $327.6 million for Fiscal Year 2024, a nearly 68 percent increase in funding over Fiscal Year 2023. The department will receive another $120 million from the early childhood trust fund to increase childcare assistance, tribal early childhood services and workforce supports, according to a report compiled by ECECD and the interim Legislative Finance Committee. ECECD Secretary Elizabeth Groginsky gave a presentation before the interim Legislative Finance Committee this week to update the committee on her department’s spending and programs.
With the increased funding for FY24, the home visiting program will grow to $28.3 million.
A legislative report found about $3.1 billion in unused capital outlay funds for FY23’s third quarter.
This is according to the Legislative Finance Committee’s quarterly capital outlay reports, which were presented by LFC analyst Cally Carswell on May 23. The outstanding capital funds includes $1.8 billion in unspent funds for projects authorized by the legislature through 2022 which do not include the 2023 funds, Carswell said. Other unused capital funds include $158 million in balances and earmark funds for projects funded by the Water Trust Board, the Colonias Infrastructure Fund and the Tribal Infrastructure Fund. There was also $463.8 million from supplemental severance tax bonds for public schools and $605.8 million for special appropriations to capital projects from 202 and 2022, according to the report. “The balances are distributed over roughly 4,000 active projects in the state and we expect that number, as well as the balances, to get bigger when funding becomes available for the projects you all appropriated to this last session, and that will happen in July,” Carswell said.
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.