SANTA FE, N.M. (AP) - A dire forecast for state government revenues in the coming fiscal year remains unchanged after a review by a group of state economists that sets parameters for government spending, a top budget negotiator in the House of Representatives said Wednesday.
House Appropriations and Finance Committee Chairwoman Patricia Lundstrom told the Associated Press that economists projected a small uptick in expectations for oil-sector income that was offset by decreases in other tax revenue. The “flat” forecast means that lawmakers are confronting a $125 million shortfall in order to maintain government services and spending commitments to schools and local governments, she said.
The Democrat from Gallup says closing the looming budget gap would require an additional 2 percent overall cut to agency spending if no new taxes or other revenues are approved for the budget year starting July 1, citing an analysis by appropriations committee staff.
“We’ve just seen from the revenue projection that we’re not getting any more from our traditional sources” of income, Lundstrom said. “I want to be able to put this budget on the floor (of the Legislature) with at least another $125 million to cover costs.”
The state has been struggling to pay its bills and sustain basic government programs amid plunging tax revenues tied to a downturn in the oil sector and a sluggish overall economy.
A package of solvency bills adopted last month plugged a current-year budget deficit and restored a modest financial cushion by sweeping cash from school district reserves and other government accounts. Spending across state agencies was slashed by 2.4 percent during a special legislative session in October, with annual reductions of 8 percent at some departments.
Leaders in the state’s Democratically controlled Legislature and Republican Gov. Susana Martinez also are seeking to boost reserves to protect the state’s credit rating and borrowing costs, but still differ on how to obtain those funds.
“We need another $100 million for the reserves,” Lundstrom said. “What we’re trying to do is avoid another downgrade in our bond rating.”
Martinez has steadfastly opposed tax increases and called for further belt tightening by state government, but also indicated she may be open to closing tax loopholes.
Many lawmakers say austerity measures have gone too far, with both Democrats and Republicans backing proposals to shore up the general fund by raising taxes on gasoline.
Lawmakers on the House appropriations committee are considering revenue-raising proposals that would tax nonprofit hospitals, tax online sales by out-of-state retailers such as Amazon and restore the sales-style gross receipts tax on medical services.
The state’s budget crisis has taken a toll on host of government services, from public defenders who have denied counsel to poor defendants to state museums that have cut back hours and increased admission prices.
Please read our comment policy before commenting.