New Mexico will have an $18.5 million revenue gap in fiscal 2011, with a $260 million shortfall on the horizon in fiscal 2012, according to a financial forecast presented last week to the Legislative Finance Committee.
The budget gap in the current fiscal year would be worse except for $21 million of unexpected revenue in fiscal 2010. Without that surplus, revenue collections in fiscal 2011 would be $40 million less than what is needed to fund the current budget.
General fund revenues will be about $5.3 billion in fiscal 2012, the report said, or about $80 million less than expected in July.
The panel of university and legislative economists will develop another forecast before the Legislature convenes Jan. 18 for a 60-day session to develop the budget for fiscal 2012.
If the current revenue estimates are correct, the state will be short next fiscal year by almost $260 million, or about 5% of the general fund budget, of what is needed to maintain the current level of funding.
The state balanced the fiscal 2011 budget with almost $370 million of temporary federal funding that will not be available in fiscal 2012.
Gov. Bill Richardson, whose term will expire before the next Legislature meets, said he does not intend to cut state spending to compensate for the expected shortfall.
If cuts are needed, he said, the Legislature and the new governor can determine the best course of action.