For next governor, new money creates options
The next governor can let the belt out. At least enough to breathe. A projected windfall of perhaps $1.2 billion awaits Gov. Susana Martinez’s successor — a plum cushion that signals a potentially dramatic departure from the recent austere period in state finances driven by a downturn in oil and natural gas markets.
Either U.S. Rep. Michelle Lujan Grisham or U.S. Rep. Steve Pearce will have many rapid-fire decisions to make after ascending to the fourth floor of the Roundhouse, but the reality of that
new revenue transforms the character of the administrative changeover. Spend? Save? Or a little of both? Both gubernatorial candidates, asked how they would approach the projected increase, outlined education and infrastructure as priorities.
Lujan Grisham, the Democratic congresswoman from the Albuquerque area and a former state health secretary, specified funding for statewide universal prekindergarten and increased teacher salaries. She added the revenue surge “dramatically highlights the need for leadership” that will deliver a “renewable energy economy” and 50 percent renewable production in the state by 2030.
Pearce, the Republican congressman with a background in oilfield services, pointed to an improved “mental health system” but echoed the caution of economists who noted the new revenue forecast derives from an inconsistent if currently rich segment of the state’s economy.
“Today’s report is unquestionably good news, but going forward we must diversify our economy to bring in more jobs and more stable sources of revenue for the state,” Pearce said in a statement.
He added a snipe: “My opponent has authored a plan to shut down this oil boom and dry up critical funding for our state.”
In her statement, Lujan Grisham fired back: “In Congress and in the Legislature, Steve Pearce consistently voted against investing in renewable energy and against job skills and career education programs. He won’t make those kinds of investments. I will.”
A Pearce spokesman elaborated that the “plan to shut down this oil boom” referred to a menu of Lujan Grisham statements or positions, including her campaign proposal for statewide rules to reduce methane waste.
The Lujan Grisham clean energy plan says New Mexico residents “should receive the full benefit of developing all of our natural resources, including oil and gas,” and outlines that her administration would “modernize” those energy sources “to make them more efficient and reduce greenhouse gas emissions.”
It might not last, and it might be out of New Mexico’s hands, but the current upward swing of the oil and gas pendulum is likely to cast the gravity of the state’s gubernatorial contest into even sharper relief.
“We must take this opportunity to get more funds to our schools, improve our mental health system, cut taxes on Social Security for seniors and make cash payments on strategic infrastructure projects like broadband, roads and wastewater,” Pearce said.
On his campaign site, Pearce calls for a diversified funding mechanism for education, “so our school budgets are not so dependent on one industry (oil and gas) that fluctuates beyond the control of New Mexico.”
“We should also ensure our reserves are adequately funded,” Pearce said.
Pearce did not specify what adequate would mean. Analysts peg at least 20 percent as desirable; the state budget had reserves of 18 percent at the end of the last fiscal year — an improvement over recent years in which the reserves were winnowed down, a depletion that drove a state financial rating downgrade.