July 22, 2024

Legislative Finance Committee emphasizes budget sustainability as revenue growth cools

As state politicians gear up for the legislative session, set to begin on Jan. 16, the Legislative Finance Committee released its budget recommendations on Jan. 5. The body suggests slightly lower spending than Governor Michelle Lujan Grisham did in her proposed budget released earlier in the week.

State economists say that revenues from the booming oil and gas sector are still growing, but that the growth is set to cool in the coming years.

As officials announced this year’s budget recommendations from the Legislative Finance Committee, or LFC, they were careful to emphasize that while their $10.1 billion budget allowed for a 5.9% increase in spending, it also allowed for money to be kept in reserve.

Senate Majority Leader Peter Wirth (D-Santa Fe) said the current budget surplus is all but unprecedented.

“This is an extraordinary time for our state,” he said. “And what the LFC has done here is come up with the right mix, by being conservative where they need to be conservative, but also spending where they need to spend.”

Governor Michelle Lujan Grisham, on January 4, released a slightly more expansive spending plan of $10.5 billion. That includes $500 million to expand access to affordable housing, and an increase in spending on public education to nearly $4.5 billion.

The Legislative Finance Committee’s budget also recommends increasing spending on public schools. Rep. Nathan Small (D-Doña Ana) said education was vital to the state’s future.

“We are investing really aggressively in workforce development across all areas continuing to understand that education, K12, and early childhood are the foundation for a strong workforce,” he said.

He also said that the LFC’s proposed budget increased funding to the Economic Development Department in an effort to diversify the state’s economy away from fossil fuels.

The committee’s budget included more funding than the Governor’s for Medicaid, in the face of reduced federal funding.

And while the LFC recommends an across-the-board 4% increase in public employees’ salaries, the Governor’s recommends a 3% increase.

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