State finance officials predict $232 million in new money could be available to legislators as they begin building the FY-17 state budget next month. That’s down $61 million from their $293 million projection last August.
In a largely optimistic report to the Legislative Finance Committee (LFC) the analysts, including DFA Secretary Tom Clifford, figured that even with tanking oil and gas prices, the corresponding savings to New Mexico consumers means they will have $600 million more dollars to spend. Also, since the federal government side-stepped a shutdown, there should be yet another $600 million in projected federal spending dollars. Overall, analysts are looking at budget growth of 3.7 percent, mostly coming from general sales.
Current projections also have $140 million available for capital outlay and $187 million available for general obligation bonds with 2016 being a GO bond year.
Executive spending priorities for the coming session were outlined, and they focus on keeping 44 percent of the budget geared toward public education, covering Medicaid increases and boosting public safety and corrections budgets. The administration does not favor an across-the-board compensation increase for state workers, opting instead for targeted increases to employees in public safety, corrections, child welfare and information technology.
LFC members were more skeptical than optimistic, cautioning administration analysts against counting too much on gross receipts and other off-sets. LFC chair Sen. John Arthur Smith (D-Deming) was “strongly suspicious” about the projected revenue growth. DFA Secretary Tom Clifford countered by saying it doesn’t help to be “too bearish” as doing so last session resulted in underestimating revenues to the tune of $130 million.
The next revenue projection is scheduled for mid-January. The 30-day, 2016 legislative session begins Tuesday, Jan. 19.