The latest estimate projects that the state will collect just under $12 billion in Fiscal Year 2024, which runs through June. That’s up by $2.3 billion from the past fiscal year and by $3.9 billion from two years ago.
All of which means that legislators will have just under $3.6 billion in so-called “new money,” this year, beyond the $9.7 billion included in last year’s budget.
Much of last year’s growth was attributed to one-time money distributed by the federal government in response to the COVID-19 pandemic. This year, the increases are more closely tied to improvements in the economy.
As is often the case, what is good for the state is not necessarily good for its residents. That includes not only high gas prices, but inflation in general. Strong consumer spending and wage growth, combined with inflation, have increased the state’s Gross Receipts Tax collections.
Oil and gas revenue continues to be the primary revenue generator for the state, but we’re in a much better position now to get through the traditional down cycles in that industry. We are expected to end the year with $3.68 billion in reserves.
As staggering as those numbers are, the sad truth is that it still won’t be nearly enough to address the many problems that have vexed our state for years - homelessness, crime, child abuse and schools that consistently underperform on standardized tests, to name a few.
Last year, Gov. Michelle Lujan Grisham tried to spread the wealth around. The largest appropriation in her proposed budget was $1 billion for tax rebates. While I like free money as much as anyone, I think that was a mistake. It sends the message that the state has more money than it needs or knows what to do with.
If that’s truly the case, we should just lower the tax rates.
The next-highest appropriation was $91.3 million to fund pay raises for state employees. Housing, health care, education, children’s services and public safety all received increases. But, I’m not sure that any of that new spending will make a significant impact.
Instead of sending checks to everyone, we should focus on those most in need.
New Mexico Voices For Children has proposed a number of policies that would directly help struggling families. They include paid family and medical leave; increased funding for early childhood care and education; a new fund to support tribal education; full funding for college tuitions; increased tax credits for young children, coupled with tax increases for upper-income residents; increased funding for the TANF program and full funding for Medicaid and Disabilities waivers.
No governor in our state’s history has ever had the kind of revenue to work with that Lujan Grisham does. She has an historic opportunity to make lasting improvements in the state during her final three legislative sessions. But we can’t fix everything at once.
The governor needs to identify her top priorities, then rally the Legislature around them. They should start with those most desperate for help.
Walt Rubel can be reached at firstname.lastname@example.org.
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