The oil boom in southeastern New Mexico continues, and that means a stream of dollars flowing to fund state government.
For Gov. Michelle Lujan Grisham, it’s a first term awash in money — so far. The boom has meant she was able to sign a $7 billion budget in April — the largest in state history with an 11.6 percent increase in spending — while still keeping reserves at 20 percent.
Now, even more money seems ready to pour in, although formal budget projections don’t take place until August.
Given the many budget cuts during the great recession — and New Mexico’s great needs in education, social programs, criminal justice and repairing infrastructure such as roads, bridges and dams — the temptation to keep spending is both real and, perhaps, even necessary.
Learning this week that the state of New Mexico’s children is the worst in the country, 50th in the annual Kids Count survey by the Annie E. Casey Foundation, makes investments in the well-being of residents even more crucial.
Still, there’s only so much money one state can spend in a year. And the best way to improve the lives of children is to help their parents find good jobs, with salaries and benefits that enable them to raise a family in comfort, if not excess.
That’s why this windfall needs to be targeted strategically. First, we need to fix structural problems — repair dams, improve roads, build high-speed internet across the state and other such projects. This kind of spending, once done, is not recurring. It can’t be slashed when the price of a barrel of oil drops. What’s more, such spending improves structural conditions to create the framework for sustainable economic growth.
The sensible reserves already being put aside can be used to cushion any downfall in revenues, too; more money should be added to the savings account. Additional tax dollars also allow the state breathing room to refashion its gross receipts tax system into one that makes sense and is less burdensome. The 2019 Legislature began changing the tax code; a broader overhaul of GRTs should be next, with the goal being a lower tax and a broader base, still excluding nutritional food.
None of this means that current recurring programs don’t need additional dollars — after all, the state still does not know whether a judge will approve its progress on spending to create a more equitable educational system. Child welfare agencies have been hurt by past budget cuts. Criminal justice spending has lagged. Public-safety needs are real, too; just look at the violent crime plaguing Albuquerque. More money in state coffers should result in spending to target the root causes of inequality and crime, again taking a long view.
That way, when billions are spent, the state will have something to show for it. Just think — we could have a state with smooth roads, dams that won’t burst, clean-energy jobs and high-speed internet across New Mexico. The improved environment would provide enough money for education, the needs of children, health care assistance and most of all, support a state economy with good jobs to enrich the lives of residents every single day.
New Mexico would be a better place to live. And in the end, that must be the goal.