The $10.2 billion budget was developed by the Legislative Finance Committee (LFC) with an eye on the future possibility that by the end of the decade, oil and gas production in New Mexico may flatten and begin a gradual decline. With the knowledge that there is no industry that can generate the same kind of massive revenue, budget writers have adopted three key strategies: slow the rate of ongoing (recurring) spending, invest in productive one-time expenditures (like capital projects) and salt away significant amounts of excess revenues in trust funds or endowments to generate interest income for the general fund in the future. This direction aligns perfectly with the Chamber’s goals – we have urged slowing the rate of spending growth, using cash rather than debt for capital projects and increasing contributions to trust funds and endowments while maintaining at least a 30% reserve. Here are some budget highlights:
- Increased year-over-year recurring spending by 6.2%, lower than the double-digit increases of the last two previous years. Slightly over 30% of recurring spending is held in reserve.
- Set aside $950 million in a Lottery and Opportunity Scholarship Trust to ensure the scholarships are available in the future.
- Placed $300 million in the “Land of Enchantment Fund,” fully funding this trust which supports natural resources projects.
- Moved over $500 million to the Government Responsibility and Opportunity Trust (GRO) to be used in future years to pilot test new programs before they are included in base agency budgets. Over $300 million will be spent over the next three to four years on “GRO” projects identified by legislators and 16 other projects, some designated by the Legislature and a few by the executive.
- Continued $82 million contributions to the Severance Tax Permanent Fund, working to build a $1 billion fund by 2033.
- Financed most of capital outlay from cash, preserving infusions from oil and gas revenues to further build the fund balance.
- Placed $50 million each in trust for housing.
It’s worth noting the Early Childhood Education and Care Trust fund has grown to $5 billion and is sending $250 million to the department for its programs, lowering the amount expended from the general fund. The Chamber was a key player in establishing both the department and the trust fund several years ago.
Other appropriations of significance include:
- $100 million for career technical education
- $15 million for medical professionals loan repayment assistance
- $60 million for workforce training and apprenticeships at comprehensive community colleges
- $10.5 million for LEDA and $6.7 million for JTIP
- $175 million to expand the Opportunity Enterprise Fund
- $1 million for tourism cooperative marketing and advertising and the travel trade program
- $16 million for national tourism advertising
- $63 million for increased Medicaid provider reimbursements
- 3% compensation increase for all state employees, including public education employees
- $750 in total for road maintenance, construction and improvements
- $50 million to shore up rural hospitals
- $5 million for food banks
- $40 million to provide universal free breakfasts and lunches to students
- $30 million for a structure literacy institute and $30 million for summer reading bootcamps for students
