State lawmakers will get revised revenue projections next week, barely giving them time to build their FY 17 budget. Seeking a second opinion or perhaps a preview of the pain, Senate Finance asked economists to comment on the state of the state’s economy.
Jeff Mitchell, director of UNM’s Bureau of Business and Economic Research, figures the total positive economic impact of New Mexicans saving at the gas pump is about $600 million, and money now available for consumers to spend on other goods and services actually remains in the state rather than lining coffers elsewhere. That’s the positive spin on the current plummet in per barrel oil prices.
The more pessimistic view was delivered by NMSU economics professor Jim Peach, who said current demand is simply not keeping pace with increased worldwide production, so prices will remain low for some time to come. Remember that each $1 drop in the price of oil translates to $10 million in diminished revenue to the state. So Peach cautioned lawmakers to not count on anything like the $232 million in new money that was projected last December.
Senate Finance chair John Arthur Smith (D-Deming) is worried about there being enough money coming in to meet the current state budget, much less funding any new initiatives in FY 17. He warns state agencies to start saving money now to help deaden future pain.
Both the House and Senate are scheduled to be back in session at 10:30 a.m. Thursday. House Regulatory and Public Affairs has lined up a major one-two punch for its first committee hearing: Three Strikes Law (HB 56) and Driver’s Licenses/Real ID (HB 99). Anticipating overflow crowds, the hearing is scheduled at 1:30 p.m. in the House Chamber.