A Big Budget Surplus Means Big Opportunities
Last week, New Mexico received some big news. When our Legislature meets in January to craft our annual budget, we could have as much as $2.45 billion more than we appropriated this year. It's a number that is tough to get your head around, but I think we can all agree that it is a lot of money. It's also an incredible opportunity for New Mexico.
About two-thirds of this projected revenue stems from oil and gas. This means New Mexico's budget is healthy when oil and gas prices are high. However, we must also keep in mind that when prices drop, we could face budget cuts that could hurt our families.
Diversifying and stabilizing our revenues is critical to building the foundation for a stronger New Mexico and ensuring that our state can fund vital programs in times of both boom and bust. We must use this once-in-a-generation opportunity to ensure that our revenues are sustainable and can support the programs that matter most to our kids, families, and communities.
We are not the only state currently seeing high revenues. While some states have decided to use this opportunity to give millions away in permanent tax cuts to the wealthy and well-connected, New Mexico has already learned the hard way that trickle-down economics does not work, and is instead making smarter choices. In recent legislative sessions, we provided more than $300 million in targeted tax cuts for New Mexico's frontline employees, low- and middle-income workers, seniors, and parents. These tax cuts made New Mexico's tax system work much better for everyday New Mexicans.
Moving forward, the state should continue making our tax system more fair and equitable and better at setting our economy up for success. Reducing taxes for middle-class workers will help families make ends meet, which means more money flowing into local economies. Lowering the state's gross receipts tax (GRT) rate and making it easier to navigate would help both families and small businesses.
We can and should use these revenues to continue to build on the historic investments we've made in our classrooms, our healthcare systems, and our infrastructure since 2019. Bringing broadband, safe roads and bridges, and modern water systems to every community will have immense pay off for New Mexicans both now and in the future. We should also make investments in infrastructure that can slow the climate crisis and withstand extreme weather. These smart fiscal policies will create employment opportunities, attract new employers to the state, and protect our precious natural resources and public lands.
All of these strategies would significantly impact the lives of kids and families across our state, and helping kids and families helps our economy. When people can afford housing and childcare, businesses have workers. New businesses are more interested in relocating to and expanding in communities with high-quality schools and accessible health care. And high-speed internet, clean water, and safe roads better equip our existing local businesses for success.
Let's use this opportunity to make meaningful change for our state. If we do this right, our communities will thrive, and our kids and families will prosper.
New Mexico State Representative Christine Chandler is Chair of the House Taxation and Revenue Committee.