DALLAS – With state revenue slipping amid depressed oil and gas prices, New Mexico Gov. Susana Martinez recommended restraint in spending in a $6.5 billion budget proposal.
Outlays for 66% of state agencies would remain flat under Martinez's proposal, although overall spending would increase by $228 million or 3.7%. Corrections officers, child abuse caseworkers and public health workers would receive "targeted" pay raises for about 3,500 of the state's 18,000 workers.
"This budget prioritizes keeping our communities, families, and children safe, while investing in critical education reforms to help our kids learn," Martinez said. "We must also focus on creating jobs and developing a more diverse economy throughout the state. With these goals in mind, I am confident we will once again be able to work with the Legislature to craft a responsible budget that will make a positive impact on the lives of New Mexicans while ensuring a foundation of fiscal stability for our state."
About $170 million, or three-quarters, of the additional funding in the budget would go toward public schools and Medicaid. Unlike neighboring Texas and Oklahoma, New Mexico agreed to accept federal funds to expand Medicaid coverage to the working poor.
Although the price of West Texas Intermediate crude has fallen 70% from its June 2014 peak, producers have not significantly slowed production in New Mexico.
Economic forecasters told the Legislative Finance Committee in December that the state continues its slow recovery from the 2008 recession despite the depressed energy market.
Elisa Walker-Moran, the chief economist with the Taxation and Revenue Department, said that New Mexico has seen 38 straight months of year-over-year job growth. The most recent numbers show 2,800 jobs in October compared to the previous year.
The severance tax collected on oil and gas and other mineral extractions is used to back bonds for schools, cities and other jurisdictions in the state.