The breathtaking nosedive in the price of oil, accompanied by a plunge in stock prices, stunned the state Monday with hints of panic seeping into conversations, not unlike what was happening in the financial markets.

With the $7.6 billion budget for the fiscal year that starts in July about to be signed by MLG conservatives were already clamoring for budget vetoes in anticipation of a steep decline in state revenue because of the oil price crash. They point out that nearly 40 percent of state revenue comes from energy production.

And they didn't have to wait long to get what they wanted. The Governor took the bait and in reaction to the market chaos vetoed $50 million in capital outlay projects--mostly for roads—and the money was moved to the state's burgeoning reserves.

Was it a panicky move? It was certainly premature, seemed impulsive and an act that cast doubt on the work she did on the just passed budget and spoke so glowingly of. Let's explain. . .

Oil crashed to around $30 a barrel Monday. The break even price for the Permian Basin producers in SE NM is around $40. The budget starting in July anticipates a price of $51 so for now we are deeply under water. But, and it's a big but, for a fiscal crisis to develop oil will have to stay well below that $51 level for a number of months and volumes would also have to drop dramatically from current record-setting levels. Only time will reveal the ultimate reality. Then you can make sound policy—not on a single day of panic selling.

The state budget places in reserve 25 percent of the entire budget or about $1.7 billion. That's not all. A new stabilization fund designed to protect the state from the vagaries of oil prices has $1.3 billion. While this oil collapse is breathtaking, the state has breathing room. As we say, the time may indeed come to go looking for more money to stuff the mattress, but today or tomorrow isn't that time.

The Governor would be better off standing by her budget and avoid cutting needed road projects noting the historic reserves put in that budget because of the possibility of the very events we see unfolding.

It's understood that the Governor trembles at the thought of being portrayed as fiscally irresponsible in the 2022 election but yielding to the fiscal hawks at the first sign of trouble only puts the power of your governorship more firmly in their hands. How about this instead:

I am pleased to sign the state budget today, probably the most timely one ever crafted. It contains historic amounts of reserves to weather even a severe economic storm. We will carefully monitor the financial markets going forward and make any necessary adjustments. For now New Mexicans can be assured that the budget being signed today safeguards our financial standing and provides funding for programs that will improve their quality of life, 

Maybe they need a sign on the Fourth Floor that says: "Don't Feed The Hawks" because once you do they are going to demand more, even if it's based on their belief that they can read the future. (They now want another $200 million in cuts on top of the $50 million).

Vetoing necessary infrastructure to pacify the consultants and the hawks is not crisis governing. If we are headed into recession, the state economy will need stimulus--like that $50 million in construction that was vetoed.