The state administration’s top finance and revenue officials on Wednesday presented the latest state revenue forecast to the Legislative Finance Committee, announcing an overall more positive outlook for New Mexico finances than was forecast in June – though significant unknowns remain, including the timing and substance of a prospective federal stimulus package and the continued spread and economic impact of COVID-19.
The Consensus Revenue Estimating Group, made up of state agency economists and economists from the Legislative Finance Committee, is forecasting an improved revenue outlook for Fiscal Years 2021 and 2022 versus the group’s June estimate. For Fiscal Year 2021, the September forecast revenue range is $460 million to $1.35 billion higher than the June estimate. For Fiscal Year 2022, the September forecast revenue range is $572 million to $1.41 billion higher than the June estimate.
In addition, revenue tracking and preliminary data indicate Fiscal Year 2020 revenues are tracking more than $500 million better than the June estimate. The improved revenue projection suggests total general fund reserves will grow to about 29.4 percent of recurring appropriations, or $2.1 billion, at the end of Fiscal Year 2020. The Lujan Grisham administration has consistently emphasized robust reserves as an important backstop to provide flexibility amid uncertain and difficult fiscal circumstances.
“Despite the many economic uncertainties, we are pushing forward as a state to ensure we continue to deliver services to New Mexicans,” said Acting Finance and Administration Secretary Deborah Romero. “There are many factors beyond our control, but we can control our spending and allocation of funds. That is why we have taken a cautious, calculated approach to our general budget and spending. The future is uncertain, but our approach will hopefully continue to put New Mexico in the best possible position.”
“Fortunately, the state prudently saved windfall oil-related revenues earned over the last two years to build New Mexico’s reserves to the highest level in state history,” said Taxation and Revenue Secretary Stephanie Schardin Clarke. “The prudence to build reserves and control expenditure growth provides New Mexico the flexibility needed to weather the current economic downturn and public health crisis while ensuring that critical government services remain available to our most vulnerable citizens.”