Big NM cash reserves tempting lawmakers

ALBUQUERQUE (KRQE) - It's a bankroll just about anyone would be proud of.

After last year's budget, New Mexico ended up with plenty left over. As of June, the state had cash balances of nearly 14 percent of its general fund budget, about $755 million.

That's money that can cover revenue shortfalls in a pinch and helps the state look more attractive to bond rating agencies. Those reserves are far stronger than they were when Governor Susana Martinez took office, despite major state budget crunches.

Some state lawmakers say this is a case of over-saving and that at least some of that money can be put to good use.

"We've got an opportunity here to restore some of the things that we either eliminated over the last few years or cut back on," said Sen. Jerry Ortiz y Pino (D - Albuquerque). "One of the areas that's taken the brunt of our austertiy over the last few years has been education."

State teachers have gone years without raises and education 

Governor Susana Martinez agrees that education in New Mexico isn't up to snuff.

"I am absolutely committed to making sure we reform New Mexico's educational system," Martinez said. "We're 47th in the nation and we've been there for decades. There is no excuse anymore."

But that doesn't mean she 's in favor of spending down the state's cash reserves just yet. A big reason is the so-called fiscal cliff federal lawmakers are negotiating over, a series of automatic spending cuts and tax hikes set to kick in next year if Democrats and Republicans can't reach a deal.

New Mexico would be disproportionately affected if the country goes off the fiscal cliff because of the state's reliance on federal dollars and jobs. A UNM study estimates the state would lose 20,000 jobs if Congress doesn't act.

"I want it to be a healthy reserve should something catastrophic happen," Martinez said. "It's important for us to be prepared just in case and not hand out raises and spend, because we have this nice reserve, without being cautious about what could happen next."

A debate between increased spending and tax cuts could be a hot topic next month at the state's legislative session, especially because current projections show New Mexico having $210 million in new money to allocate.