While both houses have recessed until Monday morning, members of the House Appropriations and Finance Committee are working this weekend on the big state budget bill. This afternoon (Saturday), they will be briefed on the proposed revisions to the state higher education funding formula. On Monday, they'll tackle higher education budgets. Senate Finance will take up those budgets on Tuesday afternoon.
Conversations at the Roundhouse have taken on a more sober tone, as everyone waits for revenue estimates this coming week and the effect of the slide in natural gas prices. About two dozen UNM students at the Capitol yesterday (Friday) for a legislative boot camp got their own personal natural gas tutorial from Sen. John Arthur Smith (D, Deming) who chairs Senate Finance.
Sen. Smith put it bluntly: "Natural gas has the ability all by itself to tank the state revenues."
At the beginning of the year, state budget gurus had consensus on a $5.67 billion budget with about $250 million in new revenues. These were based in part on projections of natural gas prices at
$5.20. Yesterday morning, those prices stood at $2.40. The prices are a moving target which depend on "dry" and "liquid" gas and other variables, which if you have an interest, you can learn more about from Jim Monteleone's article in Friday morning's Albuquerque Journal. Bottom line - there is a spread between projected prices and actual prices, and every dime in that spread equals $12
million. Sen. Smith rounded the figure to more than $100 million for natural gas alone.
Now we watch for what the Legislature will do with this information. There are budget experts who say all revenue streams need to be considered as one portfolio which on the whole still shows
positive growth. Sen. Smith urges caution and is pleased that everyone is concerned about the sustainability of the natural gas stream. In his opinion, it would be easier to come back and add
money to programs, rather than come back to subtract funds already appropriated.
So the session just got more complicated for lawmakers who want to emerge from the doldrums of three years of budget cuts and put money back into programs like higher education, and also for the Governor who wants to cut taxes to stimulate small business. Both now need to manage expectations.
The UNM students who got their crash course in state government included undergrads from Prof. Lonna Atkeson's political science class who will be serving as legislative interns. There were also
graduate students who are working diligently on SB 16, the state graduate employment tax credit. We'll have more on their efforts this coming week.
Look for our briefing on new bills and upcoming committee hearings tomorrow. Until then, have a good weekend.