The inevitable consequences of New Mexico’s profoundly unwise expansion of Medicaid are coming into sharper focus. But fiscal policy has two components: expenditures and revenue. And serious pressure is starting to build on the cash side of New Mexico’s budget.

The Land of Enchantment isn’t alone. Energy-dependent states and provinces are feeling the pain:

* In Oklahoma, the governor has “ordered state agencies … to prepare to cut nonessential expenses by 10 percent.”

* Wyoming’s Consensus Revenue Estimating Group has “calculated projected losses through June 2018” of $617 million.

* Alaska is facing down a $3 billion deficit, and legislators are examining the incentives the state uses “to get companies to come to Alaska, produce oil and gas, and generate jobs and economic activity.”

* Alberta is projecting “a record deficit on falling revenue.”

It appears that austerity (being rather generous with the term) will remain the standard operating procedure for New Mexico’s budget:

expend

But while spending has been fairly flat in recent years, a two-decade perspective reveals a very different trend. Between 1993 and 2013, per capita, inflation-adjusted spending in New Mexico rose by 47.5 percent:

percap

There appears to be a lot of room in the budget for right-sizing. Pro-taxpayer legislators should get to work on what programs and bureaucracies to cut, combine, contract, compress, and condense.

New Mexico: Land of the Free Lunch (and breakfast)?
The Right to Work Advantage