New Mexico lawmakers propose major rise in general fund spending amid oil revenue increase

(MENAFN) In a notable fiscal move, leading lawmakers in New Mexico unveiled a recommendation for a substantial 5.9 percent surge in general fund spending for the upcoming fiscal year, capitalizing on a windfall derived largely from oil-related revenues. This budgetary proposal, presented to the Democratic-controlled Legislature, outlines a plan to augment general fund expenditures by USD566 million, elevating the total to USD10.1 billion for the fiscal period spanning July 2024 to June 2025. This increment in general spending constitutes only a segment of an anticipated surplus, which is projected to swell to a staggering USD3.5 billion beyond the current tax obligations of the state.

The proposed budget blueprint delineates strategic allocations aimed at fortifying key sectors and addressing pressing societal needs within New Mexico. Notably, there is a concerted effort to elevate the standards and outcomes within the realm of public education, alongside bolstering healthcare provisions for individuals teetering on the brink of poverty. This initiative gains prominence as federal aid for Medicaid is anticipated to diminish in the post-pandemic landscape. Additionally, the proposed budget earmarks resources to facilitate a 4 percent average salary increase for state employees, complemented by compensation enhancements within public educational institutions.

A significant focus of the proposed budget revolves around augmenting support for childhood well-being initiatives, particularly within the ambit of early childhood education. The plan advocates for an augmented allocation from an existing trust established in 2020 during an unprecedented surge in oil-related revenues. This trust, dedicated to early childhood education, currently boasts an impressive reserve of approximately USD6 billion. The proposed utilization of these funds aims to expand prekindergarten programs and facilitate home visits by healthcare professionals to parents of infants and toddlers, emphasizing the pivotal role of early childhood development.

However, amidst the optimism surrounding the surplus and proposed allocations, State Sen. George Muñoz of Gallup sounded a cautionary note. Muñoz, who chairs two pivotal budget-writing committees, expressed concerns regarding the state's increasing dependence on volatile oil and natural gas revenues. He emphasized the inherent risks associated with such reliance, particularly given the unpredictable fluctuations in pricing and production within the commodities market. Despite these reservations, Muñoz conveyed a sense of cautious optimism, asserting that the proposed budget strikes a balance, positioning New Mexico for sustained growth while averting potential drastic cuts in subsequent years. As the legislative session looms, slated to commence on January 16th, the ensuing 30-day period is expected to be dominated by intense budgetary deliberations, with Gov. Michelle Lujan Grisham retaining veto power over the final budgetary provisions endorsed by the legislators.

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