Legislature blessed with $3.6 billion in “new” money in upcoming session

According to the latest news reports New Mexico has a mind-blowing $3.6 billion budget surplus available to it when the Legislature convenes in January. This is, of course, derived largely from a production-driven boom in New Mexico’s oil and gas industry. Between now and January we and others will have plenty of time to discuss potential uses for the money. For now we’d like to simply help people grapple with the sheer size of this surplus.

1. The budget surplus alone is a mind-blowing 43% of the current $8.4 billion budget which is in itself a 30% bigger budget than when Susana Martinez left office.
2. The budget surplus alone is virtually the same size as the FY23 (current year) K-12 budget ($3.8 billion) which is a 41% increase over 5 years.
3. The budget surplus is more than 7X the State’s “public safety” budget and 3.5X the entire higher education budget.
4. The State could ELIMINATE the entire gross receipts tax ($3.047 billion) for FY 2024 and still have nearly $600 million left over.
5. The State could ELIMINATE ALL personal and corporate income taxes ($2.107 billion for FY 2024 and still have $1.5 billion left over.

What WILL happen is anybody’s guess. With New Mexico’s continued economic struggles there are plenty of opportunities for the type of pro-growth tax reform the State sorely needs.

As a quick reminder, New Mexico’s state and local spending is already tops in the nation according to the website US Government Spending: