Lawmakers consider dipping into reserves, cuts to fix budget

Coronavirus New Mexico

SANTA FE, N.M. (KRQE) – An influential New Mexico lawmaker says the state could be looking at a $2 billion budget shortfall because of the coronavirus pandemic. It will take a special session in the legislature to fix it. The chair of the Senate Finance Committee said he expects lawmakers will take a second look at the budget in June, with a few goals in mind.

“To make certain the state can pay its bills, to make certain that the health people are adequately funded to take care of the coronavirus issue and, the other issue, we need to be concerned to make certain we get people back to work,” said Sen. John Arthur Smith (D-Deming).

The legislature passed a $7.6 billion budget in February for the fiscal year that starts in July. However, the pandemic has changed things since then, with oil and sales tax revenues taking a major hit.

Sen. Smith said he would consider, what he calls, “strategic cutting” to newer initiatives, like the governor’s college tuition plan. Also up for discussion is trimming back the teacher pay raises that were going to kick in this summer. Plus, Sen. Smith said we will definitely need to dip into our reserves.

“With the strong reserves that we have, and if we get additional flexibility with the federal stimulus money, we should be able to navigate that budget, assuming things don’t get any worse,” he explained.

The senator says New Mexico has nearly $2 billion in its rainy day fund. That is among the largest in the country in relation to its budget. Still, we don’t know how long an economic recovery will take. So, Sen. Smith said the state must make sure to have reserves for the next couple of years as well.

New Mexico also has about $17 billion in its Land Grant Permanent Fund, which helps pay for schools every year. Gov. Michelle Lujan Grisham said in a news conference Tuesday that she supports dipping into that fund. However, it would require voters to approve a constitutional amendment first.

New Mexico Coronavirus Resources

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