Gov. Michelle Lujan Grisham announced Wednesday a date for the upcoming special legislative session and said she believed the state could shore up a huge budget deficit without making big cuts to key areas.

The session will begin June 18 and should conclude by that weekend, the governor said.

“I’m feeling very optimistic about our ability to have great agreement,” Lujan Grisham said. “Bipartisan work is what we’re hoping for, of course, to make sure that we make the changes necessary to keep all of the wheels turning in state and local government.”

New Mexico is looking at an estimated budget shortfall for next fiscal year of between $1.8 billion and $2.8 billion, the governor said — a higher upper range than state economists’ recent estimates.

Additionally, revenue for the current fiscal period, which ends June 30, could be between $368 million and $483 million short of projections, state economists have said.

State finances are suffering as the novel coronavirus pandemic and plummeting oil prices have taken a major toll on tax revenue and royalty payments.

New Mexico should be able to use federal stimulus money and its own reserves to plug the majority of the shortfall for fiscal years 2020 and 2021, the governor said. That would allow officials to avoid making “deep cuts” in areas such as education, health care and public safety, she said.

“We’re in a pretty good position where I don’t anticipate that we’re going to have to make deep cuts,” the governor said. “But we’re going to have to slow spending.”

Lujan Grisham said she believed legislators could mend the budget without having to lay off or furlough state workers.



She added that lawmakers would need to consider cutting capital outlay projects that were approved in the session earlier this year and weren’t part of a round of vetoes carried out by the governor in March.

New Mexico is expecting to receive $1.25 billion from a huge federal stimulus bill passed by Congress in March. The state also plans to receive money from the Federal Emergency Management Agency, the governor said.

Sen. John Arthur Smith, chairman of the Senate Finance Committee, said later Wednesday that he agreed legislators could mend the fiscal year 2021 budget without making big cuts to essential services.

“Quite frankly, we concur with that,” said Smith, D-Deming, when asked about the governor’s comments. “It shouldn’t be severe.”

Smith said the state could run its reserves down to about 12 percent and still plug the budget hole, as long as it’s able to use federal stimulus money as well.

The bigger problem, he said, might be how to fund the fiscal year 2022 budget.

“If this downturn lasts into ’22, then you’re in deep, deep trouble,” he said.

In addition to reserves, the governor said the state could use money from “other permanent fund opportunities,” without specifying which funds she was referring to.

Lujan Grisham said earlier this month she would support tapping New Mexico’s nearly $18 billion Land Grant Permanent Fund to help shore up the state budget. Yet key lawmakers such as Smith have said they would oppose such an effort.

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Reporter

Jens Gould covers politics for the Santa Fe New Mexican. He was a correspondent for Bloomberg News in Mexico City, a regular contributor for TIME in California, and produced the video series Bravery Tapes.

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(7) comments

Kathy Fish

“If this downturn lasts into ’22, then you’re in deep, deep trouble,” he said.

Gee, thanks for this vague, dire statement no English teacher would ever approve.

kyle renfro

so what is the meat of the message. "Just like before people are giving me money to spend, we are not earning nada" "Just like i spent the surplus, i will spend this and then beg for more money, my plan "

Connie Lopez

I say a great plan. Spend, spend, spend. That's what money if for amigo Kyle Renfro-- not hoarding it. NM needs all the financial help possible. Via MLG!

Peter Wyman

Yet NOWHERE in this puff piece does Jens Gould or The Santa Fe New Mexican...aka the Propaganda Arm of the New Mexico Democrat Party....mention that Lujan Grisham inherited a budget SURPLUS of $1.2 to 2 BILLION dollars, and quickly turned it into budget DEFICIT of over $1 billion...and she did so WELL BEFORE any of us heard the word "coronavirus".

The game plan of many poorly-run states led by Blue Governors: "We're in a deep hole, and we have been for years. Let's blame it all on the 'rona, and push for federal funds to bail us out in a stimulus package."

And two things will likely happen:

1. They'll get their stimulus bailout.

2. Within a year or two after that, they will be back in deep deficit-land. Because that's all they know.

Connie Lopez

'"We're in a deep hole, and we have been for years. Let's blame it all on the 'rona, and push for federal funds to bail us out in a stimulus package."' Frankly, genius. That's what money is for. Life is too short to hoard. Viva VP MLG

Stephen Hauf

Your response does not explain why every state budget been balanced. Often by the Governor's Line Item veto and despite your partisan response, this has included Governor's of both parties. Tough desicisions WILL BE MADE and my job as a teacher is on the chopping block.

Paul R. Swartz

My home budget is considered by this family as balanced when less is spent than EARNED. Oh wait, Democrats do not know how to earn. Just to squander the benefits gained by thinking, working, wealth producing, citizens. They are generally desperate to gain approval from gov dependents, promising benefits they can not deliver. All the while expanding their dictator agenda and elite life of ease.

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