Lawmakers propose $10.1 billion budget

SANTA FE – State lawmakers have unveiled a $10.1 billion budget proposal they say will help keep New Mexico on sound financial footing if the oil and gas boom that pays for almost half the state’s spending cools down in the coming years.

Their proposal is about $400 million smaller than the fiscal year 2025 budget Gov. Michelle Lujan Grisham unveiled Thursday in advance of the 30-day legislative session starting next week.

The goal, members of the Legislative Finance Committee said during a news conference Friday, is to build new trust funds and find ways to stretch out this year’s record revenue into future years rather than blow it in just one.

“It’s an approach that creates longevity in the budgeting process,” said Sen. George Muñoz, D-Gallup, chairman of both the Legislative Finance Committee and the Senate Finance Committee.

This approach will let lawmakers “go every single year for five to 10 years without having to cut” funding in the future if revenue drops, he said.

“It keeps the state of New Mexico able to grow over the next couple of years without massive cuts,” Muñoz said.

The lawmakers’ proposal represents a 5.9% — or $566 million — increase over this year’s budget.

The governor and lawmakers typically unveil competing budget proposals shortly before the start of a session, which occurs this year on Tuesday. That’s when the real work begins as both sides hash out details and differences, make compromises and ultimately coming up with a mutually acceptable budget the governor can sign into law.

This year, lawmakers have 30 days to get the job done.

Some lawmakers, including Muñoz, have cautioned the good times may be coming to an end since so much of the state’s revenue is dependent on the boom-and-bust industry of oil and gas.

New Mexico’s oil production jumped to 658 million barrels in fiscal year 2023 from 531 million barrels the previous year, but the industry’s growth is expected to slow in another year or so.

Sen. Pat Woods, R-Broadview, said in an interview Friday he likes the multiyear approach of saving some current revenues for the future.

Noting that some past budgets have increased spending by as much as 10% — the governor’s budget proposal equates to a nearly 10% increase this year — Woods said “we might be able to sustain a 3, 4, 5% increase in our state budget over the next few years.”

The LFC’s proposal represents an effort to “get spending under control,” he said.

“Let’s put some of this money into ‘tomorrow’ money,” he said.

Still, Senate Majority Leader Peter Wirth, D-Santa Fe, said during the news conference that in his 20 years as a state legislator, he has never seen the state in such a financially strong position.

“This is an extraordinary time in our state and what the LFC has done here is come up with the right mix by being conservative where they need to be conservative but also spending where they need to spend ... so the big ups and downs that we know are to come will level out.”