Astonishing Surplus Numbers Have Even Penny Pinchers' Eyes Popping; Revenue Projected To Swell To "Historic" Levels; A "Once In A Century" Event, Can Guv And Legislature Live Up To The Promise?

Rep. Lundstrom (Moore, Journal)

Now even the penny pinchers' eyes are popping as revenue projections for the state reach astonishing levels.

Just look at that ear-to-ear smile of Rep. Patty Lundstrom, chair of the House Appropriations Committee, as she basks in the news. 

And that grey-haired eminence David Abbey, director of the famously frugal Legislative Finance Committee, seems to be at least trying to form a grin.

When the Santa Fe budget hawks get a case of the giggles you know you're in uncharted waters. And how could they not?

The jaw dropping LFC forecast says the oil boom and higher gross receipts taxes mean that for the first time state revenues in a budget year will top $10 billion--actually challenging the $11 billion mark in fiscal year '24 that begins next July. 

By comparison the current budget is $8.5 billion. That leaves at least $2.5 billion in new money for the legislature to divvy up at its 60 day session starting in January. 

But that's only the half of it. $2.6 billion will be reserved for the Early Childhood Trust Fund because of the soaring revenues. That's what oil above $100 bucks a barrel will do when combined with record production levels in the SE Permian Basin.

Senate Finance Committee Chairman George Munoz called the enormous cash windfall "a once in a century" event. By George, we think he has something there. 

State Sen. Michael Padilla rightfully labeled the revenue records "historic" but that seemed like an understatement given the numbers being thrown around.

WHAT NOW?

So what now? Can the Governor and 112 legislators effectively deploy the immense treasure?

They already have a start on it because of last year's record revenues from the oil fields, says ABQ Dem state Sen. Jerry Ortiz y Pino, one of the state's leading liberals. He told us:

Joe, we have already set up some endowment streams for the new money and I expect there will be more. The endowments will throw off money each year for particular programs such as funding tuition for professionals we badly need. That way when the oil money subsides, the endowed programs will continue into the future.

The senator, 79, now serving his fifth and final term, cited as an example a new law sponsored by Sen. Nancy Rodriguez that dedicates a percentage of the annual severance tax bonding capacity to the construction of affordable housing. That's expected to generate $25 million a year but would go higher if leveraged with federal and other monies.

Budget watchers we interviewed said the state's problem is no longer money but finding adequate staffing for the many programs that are on the books and poised to make a difference in the years ahead--if fully operational.

Dem consultant Sisto Abeyta, who has been a student of the legislature for over 20 years, noted that behavioral health personnel are lacking in a state with severe mental health problems and the new money is an opportunity to recruit out of state staff with housing and other incentives. 

The moderate Dem also urged MLG to "let her cabinet secretaries off the leash" and present 'pie in the sky' budgets to the legislature:

This is the time to lay it all on the table. What are the best achievements that each department believes it could achieve with ideal funding? That doesn't mean they get it but it could unearth new ideas and approaches we sorely need with this kind of surplus. 

Rebates, as was done this year for the middle and lower income classes, are sure to make a comeback next year. Checks of at least $1,000 or more for households making less than $200,000 would be a low starting point.

Budget mavens say funding for Medicaid, the unemployment insurance fund, roads and bridges are absolute no-brainers for the next five years. They point out the state will also receive $3.7 billion in federal infrastructure funds over the next several years. 

THE VIEW FROM HERE

The Legislature has lost much institutional knowledge of late and the current Governor, while productive, has not been especially bold in stating her goals for the revenue gusher. We need to hear more from her on what a second term would look like, should she win re-election. 

Oversight of this green gold rush is also a worry for both liberals and conservatives, although the LFC does good work in that regard.

Certainly, Fred Nathan of Think NM and others are spot on in calling for the legislature to delegate power over capital outlay projects to a special legislative committee or even an outside commission and finally put an end to the inefficiency in completing the  projects. 

That committee or commssion could also advise on the use of the mammoth inflow of federal infrastructure funds. Santa Fe has been too quiet for our tastes. 

The stakes are way too high now not to straighten out the capital outlay chaos, as Senator Pete Campos has begged for year after year. 

Given the size of this golden goose, needed tax reform for the business community is ripe for discussion. A bipartisan plan should have easier going now. That plan also needs to emphasize renewing the interest out of state businesses once had in coming here but now treat us as fly over country.

The foot-dragging and sometimes bureaucratic incoherence in addressing the landmark Yazzie/Martinez court ruling directing the state to provide proper education to at-risk students, should be quickly put to rest. The state can now appropriate without fear as much as it takes to get results this decade. However, no amount of money will resolve the struggles between the state and the parties to the lawsuit. That demands executive leadership. 

It's been a while since the state's slogan "it grows as it goes" has had much meaning to many citizens. But with the financial skies so sunny today there are reasons to hope--or to at least imitate that beaming smile of Rep. Lundstorm.

THE BOTTOM LINES 

We get this update from Angie Poss on the management of the campaign to pass the constitutional amendment to fund early childhood education that we blogged about Wednesday: 

Rachael Maestas and I serve as the communications consultants for Vote Yes for Kids - the campaign supporting Constitutional Amendment #1. You wrote that Matthew Henderson is the campaign manager, when it is actually Eli Cuna of Semilla Strategies who is running the campaign. 

This is the home of New Mexico Politics. 

E-mail your news and comments. (newsguy@yahoo.com)

Interested in reaching New Mexico's most informed audience? Advertise here.  

(c)NM POLITICS WITH JOE MONAHAN 2022