Thanks to a big jump in oil and gas dollars, New Mexico can expect a multi-billion dollar increase in state revenues.
However, the volatility of the industry and a possible recession could damper some of those numbers.
New revenue estimateswere presented Monday to the Legislative Finance Committee.
New Mexico economistsestimated state government income of nearly $12 billion for the fiscal year running from July 2023 to June 2024. That income would exceed current annual spending obligations by $3.6 billion, or 43%.
The numbers will be the basis for budget negotiations when lawmakers meet for the 60-day session beginning in January.
Retiring Secretary of the Department of Finance and Administration Deborah Romero told the committee to be careful with the extra dollars since things could change quickly.
“While the state’s financial status looks promising, I caution against growing the current budgets too much given the risks presented today,” she said. “Leaders have opportunities to make once in a lifetime investments for the state in things like water, rural health, broadband, and cyber security just to name a few but those are the once in a lifetime things that we should invest in while not growing our recurring funds.”
National economists say the odds of a recession next year are a little less than a coin flip. In New Mexico, state economists say a recession would dampen wages, salaries and consumer spending, posing serious downside risks to both income and Gross Receipts collections.
But with a large pot of additional income, lawmakers are already considering what can be done with it.
Committee vice-chair, Gallup Senator George Munoz says it’s the greatest opportunity in state history to make changes that matter to everybody.
He says New Mexico can use the extra funds to set the state up so it doesn’t have to be so dependent on oil and gas funding.