Darn. It's only $1.1. billion. No matter. The projected state budget surplus could be triple that and still the hawks that control the Legislative Finance Committee would urge that most of it be hidden under the mattress.

And that's what happened Monday as the surplus projection from state economists for the budget year that begins next July 1 came in lower than expected in some quarters but is still a massive $1.1 billion or 17 percent of the current $6.3 billion state budget.

That enormous number was a bit of a letdown because state House Speaker Egolf threw out the possibility of $2 billion and Senate Finance Committee Chairman John Arthur Smith mentioned $1.5 billion. Still, it is the largest projected dollar surplus in the history of the state. No one is sneezing at it and it could still go higher.

The LFC bean counters immediately warned that spending a substantial portion of the money on recurring programs (like public education) would put the state at risk and urged much of it be saved.

They advocate that any new spending be mainly on one time projects like road work etc. Never mind that New Mexico has been at risk for the past decade with stagnant economic and population growth, rampant crime and horrific child abuse and murders stemming from an economic and social decline that has caused untold suffering and kept the state in the gutter in the important national rankings.

The point that the LFC economists continue to miss and that those on our list of "No Bullshit Economists" get--including Dr. Chris Erickson and now retired Dr. Jim Peach of NMSU--is that an investment in people is now critical to reversing the state's poor economic and educational standing. Not taking that investment risk is the real risk New Mexico has taken and it continues to stare at the depressing consequences.

A COMING CLASH

The austerity hawks desire to squirrel away even more cash and shy away from recurring spending will clash somewhat with the views of incoming Governor Lujan Grisham who said during the campaign increased spending on public education and upgrading the beleaguered Children, Youth and Families Department is essential. But it remains to be seen how aggressive she will be and whether the hawks will corner her. And also whether she will be satisfied with base hits that the spin doctors will try to frame as home runs.

IT'S DIFFERENT NOW

Not unexpectedly, the LFC economists downplayed the enormity of the surplus. They characterized it as being "similar" to ones over a decade ago and that ultimately disappeared in an oil bear market, leaving the state with a big budget hole because of increased spending.

However, the series of annual surpluses that were presided over by Governor Richardson--and led him to rebate some of the money directly to taxpayers--were in the hundreds of millions--not over $1 billion--and they were not accompanied by technology that has made oil drilling profitable in the Permian Basin even if prices go into the low 40's. Not to mention that the Permian is now found to hold some of the largest oil reserves on the planet. Things do change.

The risk is that the economists are overplaying the Bear market scenario for New Mexico. And, of course, we could be downplaying it. That's the argument going forward.

FORWARD OR STATIC?

We and others who see the cup half full and a great opportunity to begin the long march in reversing the state's dismal social conditions with aggressive budgeting are not going to bang our heads against the wall. The point has been made over and over again for the past eight years. If New Mexico wants strategic investments in its people it can now do so with that $1.1 billion surplus and a small portion of the $18 billion Land Grant Permanent Fund. It's that simple.

If Lujan Grisham and the Legislature want the incrementalism of the Richardson years--when the state was a much different place and not nearly as plagued with the menacing issues that it is today--that's their call. From this corner that looks like a recipe for continued failure. There's really not much more to be said.

THE BOTTOM LINES

In a first draft Monday we had the projected state surplus for the budget year that goes to next July 1 at $900 billion. Of course, we meant $900 million. And in the new budget projections released Monday it went up to $950 million.

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(c)NM POLITICS WITH JOE MONAHAN 2018