The Latest: NM Republicans warn against government expansion
SANTA FE, N.M. (AP) — The Latest on New Mexico’s state revenue forecast (all times local):
Republican legislators are warning against the permanent expansion of state government as New Mexico anticipates a continued windfall in revenues linked largely to oil and natural gas production.
House Republican minority leader James Townsend of Artesia said Wednesday in a statement that new money should be used to invest in highway improvements or high-speed internet infrastructure and not “big government” policies. He also wants reforms that would reduce tax rates on sales and services while eliminating exemptions.
GOP Rep. Jason Harper of Rio Rancho says the state is spending a lot on film-industry incentives and should investment more broadly in economic development.
State economists say general fund revenues for the coming fiscal year will exceed current annual spending by more than $900 million. They also are say state finances are at increasing risk if the oil sector falters.
A panel of legislators met in the mountain resort of Red River to study ways to shield state finances finances from boom-and-bust cycles in the oil sector.
A state economist says New Mexico is likely to increase state personal income tax rates on upper-income households based on trends in state revenue.
Chief Economist Dawn Iglesias of the Legislative Finance Committee said Wednesday that the state revenue growth is likely to stay within a range that would trigger a new 5.9% tax rate, up from 4.9%.
Legislation adopted this year triggers the rate increase if annual state general fund grow less than 5% or decrease.
The increase would apply to single filers earning over $210,000 and families earning over $315,000 that file jointly, starting Jan. 1, 2021.
Government income continues to surge in a state with the highest rate of poverty in the western U.S. amid record-setting oil and natural gas production in New Mexico.
Economists from three state agencies and the Legislature said Wednesday that state general fund income for the coming fiscal year that begins on July 1, 2020, is expected to surpass current annual spending obligations by $907 million. That represents a nearly 13% surplus over current spending levels.
Most of the fiscal windfall is linked to steadily growing oil and natural gas production focused in the Permian Basin that straddles the state line between New Mexico and Texas.
The fiscal forecast holds major implications for public school budgets, tax incentives to the film industry and an array of state government services.
This version of the story corrects upper-income threshold for higher tax rates to $315,000.