New Mexico legislators back slower, sustained growth in government programs with budget plan

Leading New Mexico lawmakers are recommending a 5.9% increase in general fund spending for the coming fiscal year amid a windfall in oil-related income

SANTA FE, N.M. -- Leading New Mexico lawmakers on Friday recommended a 5.9% increase in general fund spending for the coming fiscal year amid a windfall in oil-related income, while also sounding a cautionary note on the future of the state's petroleum bonanza and setting aside more money in savings and investment accounts.

The proposal from a lead budget writing committee to the Democratic-led Legislature would increase general fund spending by $566 million to $10.1 billion for the fiscal year running from July 2024 to June 2025. The increased general spending represents a fraction of an anticipated $3.5 billion surplus of state income in excess of current tax obligations.

The budget blueprint would bolster efforts to improve student achievement in public education, buttresses health care for people in poverty or on the cusp as federal support for Medicaid recedes in the aftermath of the pandemic, and provide pay raises averaging 4% to state employees along with compensation boosts at public school and colleges.

Support for childhood wellbeing also figures prominently, including a recommendation to increased spending from an early childhood education trust to expand prekindergarten and home visits from nurses for parents of infants and toddlers. The early childhood education trust was established in 2020 amid an extraordinary surge in oil-related income and already contains roughly $6 billion.

State Sen. George Muñoz of Gallup warned that the state budget is more reliant than ever on income from oil and natural gas — a commodity subject to volatile swings in pricing and production.