Budget woes could call lawmakers back to work
SANTA FE — New Mexico’s Legislature could be called back to the capitol for a special session later this year if state revenues continue their downward slide.
Lawmakers headed home warily Friday to distant corners of the state after approving a $6.2 billion budget that trims spending by $7 million.
The state is drawing down its reserve funds and pinching pennies to pay for day-to-day government operations because of plunging cash streams linked to oil and natural gas production, as well as weaker-than-expected sales and income tax receipts.
New Mexico and various other energy-dependent states are weighing whether to tap into rainy-day funds. New Mexico’s Democratic-controlled Senate last week voted in favor additional withdrawals from the state’s largest permanent fund to boost educational spending, though the measure died in the Republican-led House.
At a news conference Thursday, Republican Gov. Susana Martinez said she still sees a special session as unlikely.
The state has a little over $100 million in quickly accessible reserves available before it would need to tap into money from a tobacco settlement. That last resort measure requires the Legislature’s approval.
It remains unclear whether the cushion will be enough.
“In some ways that’s a lot, but in other ways it’s not a lot considering the revenue reductions we’ve had in the last two months alone,” said David Abbey, staff director of the state Legislative Finance Committee.
Since December, state analysts have trimmed revenue expectations for the coming fiscal year by over $300 million.
Current-year revenues were shrunk last week by 2 percent, or $125 million.
As an added precaution, the Legislature has given the governor extra authority to trim spending and balance the state’s checkbook in the event of a close call. Executive agencies also were given special latitude to shift funds among programs to make ends meet.
For now that translates into some hiring freezes, reduced travel and special attention to contracts _ but not employee furloughs or layoffs.
Spending increases are planned next year to offset rising costs of Medicaid health care. Modest increases also were budgeted for state prisons, police, teachers and child protective services.
Lawmakers avoided tax increases by scouring agency accounts for $88 million in one-time funding.