Revenue surplus less than expected

Governor's Office estimates figure at $225 million rather than nearly $400 million

Kate Nash | The New Mexican

8/12/2008 - 8/13/08

One thing is certain about the revenue projections for the special session that starts Friday: They will be lower than the nearly $400 million the Roundhouse thought it had to spend.

Significantly lower.

One preliminary estimate showed the surplus revenue from high oil and natural-gas prices had dwindled to between $100 million and $150 million, according to the head of the Legislative Finance Committee.

Gov. Bill Richardson's office, however, says the figure is $225 million. The dip from original estimates is attributable to a decline in the cost of oil and gas.

What all that means for the fate of a health care plan, a tax-rebate package and a series of highway projects remains to be seen.

But Richardson's office said the session will be held.

"Governor Richardson is revamping his CARE package to reflect the new revenue figures," a statement from his office said Tuesday evening. "The new package will be presented to legislators before the special session starts Friday."

Already, lawmakers are fretting about the new figures. "I think it's going to be a much smaller rebate check, significantly smaller," said state Sen. John Arthur Smith, D-Deming.

"I strongly suspect GRIP (the highway projects) is out the window, and it wouldn't surprise me if some of the recurring dollar spending is cut," he said.

Richardson spokesman Gilbert Gallegos said it's too early to say whether the rebates would be smaller.

"The bottom line is, the state still expects $225 million in extra money — money that should go back to New Mexico families who are struggling to make ends meet," Richardson said in a statement. "I am confident we can put money in people's pockets in a fiscally responsible way."

Smith, chairman of the Legislative Finance Committee, said he's having trouble with the numbers the Governor's Office is using.

Members of the committee worked with economists to do calculations as well, he said, and those numbers showed the state would have much less than the projections Richardson's office released.

"But even if you took his numbers, that is down significantly and still trending down," Smith said.

Richardson has proposed giving an average rebate of $206 to residents; to require all children 18 and younger to have health insurance and to complete highway projects around the state.

Doing all that would cost more than $469 million, including $211 million for the relief plan; $200 million in road projects; and $58 million to expand health care coverage to the 50,000 New Mexico kids without it.

Already, Richardson has scaled back his health-insurance plan, which started in the regular session this year as a proposal to cover the 400,000 New Mexicans without insurance.

Much of the money for the plans was expected to come from the surplus while spending on health care would come from new money expected to hit the state's general fund next year.

Projections for that new money also declined, according to Tuesday's revenue forecast.

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog, Green Chile Chatter, at www.santafenewmexican.com.