Gov. Michelle Lujan Grisham on Monday unveiled a $7.3 billion spending proposal for the upcoming fiscal year that she says is designed in part to help navigate the state of New Mexico through the end of the coronavirus pandemic.
The governor’s budget, which would represent a 3.3 percent increase from the current fiscal year ending June 30, includes $475 million for additional pandemic relief for New Mexico residents and businesses.
“We’re looking at a variety of things to help those most in need, whether it’s extending the working families tax credit, checks to central workers [or] supporting businesses that have struggled throughout this pandemic,” Dominic Gabello, senior adviser to the governor, said during an online briefing with reporters.
“We set aside a pot of money so that we’re flexible to what the Legislature is looking to do, and … we’ll be working with them on that,” he said. “But this is a potential huge investment to support New Mexico families with one-time funds.”
While the budget proposal doesn’t include across-the-board pay increases for state employees, it reflects more optimism than initial predictions from June when state agencies were directed to reduce their general fund spending by 5 percent.
Officials said the more than $1 billion in federal stimulus funds the state received under the CARES Act — as well as a better-than-expected recovery in oil and gas — contributed to the improved budget outlook.
Agency budgets are largely flat under the governor’s spending proposal, though some agencies, including the Department of Health and Human Services, would see increases as part of the state’s efforts to deal with the repercussions of the pandemic.
The proposed budget, for example, includes a $16 million increase for the Occupational Health and Safety Bureau “to ensure business and institutions are safe for the public during the pandemic.”
The governor’s budget also states New Mexico is recovering faster than initially predicted.
Debbie Romero, acting secretary of the state Department of Finance and Administration, said the state is “really in a good place.” She also said she wouldn’t be surprised if revenue projections during the middle of the 60-day legislative session, which begins next week, show the state to be in an even better financial position.
“I just don’t see that it’s as critical and as dire as it was in June,” she said during the briefing.
Romero said the coronavirus pandemic revealed gaps within the state government.
“We need to do a lot more public health, public safety and then we’re not going to lose sight of the fact that we still have to do a lot in early childhood,” she said.
The proposed budget includes $893.1 million for behavioral health support to help New Mexicans grappling with mental health challenges.
“We try not to litigate ancient history, but behavioral health was decimated under the past administration, and we’ve been trying to rebuild that ever since [Lujan Grisham] has been in office,” said Tripp Stelnicki, the governor’s chief spokesman.
Lujan Grisham’s proposed budget recommends maintaining reserves at 25 percent, or about $1.8 billion, which a spokesman for the Economic Development Department said may be an all-time high.
In a statement, Lujan Grisham also called her proposal a “fiscally responsible budget” that maintains essential funding for public education, innovative economic diversification and public safety, among other areas.
“The pandemic and economic uncertainty may have disrupted our forward momentum in job creation, child well-being improvements, and various other policy emphasis areas,” the governor said. “But we are ready to bounce back quickly and robustly. This budget recommendation is our first step to position New Mexico to prosper in a post-pandemic world.”
Other budget highlights include $193 million for the continued rollout of early childhood education and care investments; $5.1 million for youth, adolescent and young adult suicide prevention; $637,300 to the Children, Youth and Families Department for a new 24/7 text line for kids to report neglect or abuse; $25 million to restore and revitalize the tourism economy; and $10 million from the general fund for broadband expansion across New Mexico, “which should be bolstered by significant funding from capital outlay,” the state Department of Finance and Administration said in a news release.