Senate Passes Fiscally Responsible Budget & Revenue Package

Santa Fe, NM – The Senate today passed the 2018 Fiscal Year 2018 budget and a package of new recurring revenue needed to prevent further cuts to critical state services like public education while leaving our state with a responsible level of reserves.

The revenue package in HB202 will generate an additional $363 million in recurring revenue in Fiscal Year 2018. The funds fill the projected shortfall of $120 to $125 million and generate 3.1% of cash reserves in FY18 and 5.7% in FY19. Maintaining a healthy level of reserves is critical to obtaining a favorable bond rating – any reduction of this amount could result in a further downgrade to the state’s credit score.

The budget passed by the Senate includes nearly $5 million dollars more in funding for public education through the State Equalization Guarantee (SEG) distribution than what was previously passed by the House of Representatives. In addition to the added infusion to the SEG, the budget includes a $15 million increase in funding for early reading initiatives, interventions for struggling schools, and funding for the potential lawsuit on the sufficiency of public education. The total $2.69 billion appropriated for public education accounts for an increase of $13.3 million compared with the final appropriation in Fiscal Year 2017.

“This budget and revenue package reflects the desire of the legislature to produce a plan that supports New Mexico families and makes practical long-term spending decisions necessary for the success of our state,” said Senate Finance Chair John Arthur Smith. “By raising new recurring revenue, we were able to prevent dramatic cuts and strengthen our support for critical state services like public education all while leaving an appropriate level of reserves necessary to reassure bond companies that we have financial stability needed to protect our credit rating.”

Both House Bill 2 and House Bill 202 return to the House of Representatives for Concurrence.