CHAMA — New Mexico’s revenue jackpot shows no signs of slowing down, with inflation-related consumer spending, strong wage growth and increased oil production propelling the state’s financial outlook to dizzying heights and raising new questions about how the unprecedented windfall should be put to use.
In all, lawmakers will have a projected $2.5 billion in “new” money during the budget year that starts in July 2023, according to new estimates released Wednesday by legislative and executive economists during a Legislative Finance Committee meeting in Chama.
That’s in addition to a projected budget surplus of nearly $3.8 billion for the current fiscal year — and about $2.6 billion set to flow into a state early childhood trust fund.
Sen. George Muñoz, D-Gallup, called the revenue bonanza a “once in a century” opportunity that could allow New Mexico to avert the big budget swings — cycles of spending growth followed by cuts — that have been common over the last decade.
“You can change the complete path of this state,” said Muñoz, who cited an overhaul of the state’s tax code and financial relief for state residents as among the possible ways legislators could utilize the mountain of revenue.
In all, the projected $10.9 billion in revenue for the coming fiscal year would be more than double the $5.4 billion in revenue the state took in just over a decade ago — during the 2011 fiscal year.
Meanwhile, the state’s staggering revenue situation belies more complicated economic realities.
New Mexico’s employment levels have grown steadily since plunging during the early stage of the COVID-19 pandemic, but the state’s 4.9% unemployment rate for June was the nation’s highest, according to the U.S. Bureau of Labor Statistics.
In addition, while national employment has rebounded to pre-pandemic levels, the state is still about 10,000 jobs short of reaching its total workforce of 861,200 residents in March 2020, according to data presented Wednesday by the state Taxation and Revenue Department.