RGF in Las Cruces Sun News: Las Cruces overspent. It’s time to cut | Opinion

The following appeared in the Las Cruces Sun-News on April 26, 2026.

After years of overspending the City of Las Cruces, like Albuquerque, faces a budget deficit.  Unlike Albuquerque which has lost people, Las Cruces continues to grow and has seen a 7.08% increase since the 2020 census. That means that the City can and should be able to grow its budget albeit at a reasonable and steady pace with consideration made for rising inflation as well.

Unfortunately, it looks like the City’s spending has overshot the mark dramatically:

• FY24: The city approved a $519 million budget, which at the time was the largest in city history, with a 9.4% increase to the general fund.
• FY25: The city adopted a $596 million budget that added 21 new positions and increased personnel spending by $10.2 million.
• The FY 26 budget was $612.2 million.

In other words, in just the span of three years Las Cruces spending rose by an eye-popping 18%. Budget growth should generally track with the combined rates of inflation and population growth. Our estimate is that those have combined for a rate closer to 7 percent or so over that three-year period, so some budget cuts are in order.

The good news is that tax hikes do not seem to be part of the conversation at this point. That should continue to be the case especially since votes just approved a gross receipts tax in late 2024.

While cities should be more financially responsible, it is also true that Albuquerque and Las Cruces don’t benefit in the same way as the State does from New Mexico’s oil and gas boom.

As we elect a new governor to our State it is worth discussing innovative ways for the State to leverage some of the piles of cash to go along with much-needed reforms to the State’s broken and anti-business gross receipts tax.

In 2023 when bipartisan reform legislation with Gov. Lujan Grisham’s support was killed due to lobbying from cities that would have taken a trivial budget cut from lost GRT revenues in the proposed reform. A governor and legislature that cared more deeply about making needed tax reforms to grow New Mexico economically would prioritize innovative ways to bring these and the rest of New Mexico’s cities on board with needed tax reforms.

In the meantime, the State will continue to massively grow its budgets while compiling a permanent fund valued at more than $70 billion. Cities will face relatively constrained budgets, and the gross receipts tax will hold New Mexico back from real prosperity and economic growth.

This is NOT an argument for the State subsidizing local budgets, but if a compromise could be achieved that resulted in needed reform of the GRT as well as greater budgetary flexibility for cities it sold be a win-win.

Paul Gessing is president of the Rio Grande Foundation, an Albuquerque-based think tank focused on the importance of individual freedom, limited government and economic opportunity.