The economic fallout from the COVID-19 outbreak may prompt lawmakers in New Mexico to re-evaluate a series of capital outlay projects approved earlier this year.
Roughly $365 million in capital outlay and road infrastructure projects were approved during the regular 2020 session of the New Mexico State Legislature, which concluded on February 20.
The capital outlay included funding for everything from senior centers to libraries, school upgrades, and college and university facility construction and renovations projects.
Governor Michelle Lujan Grisham ultimately vetoed some $150 million in both road work and capital outlay projects.
A special session of the legislature, with members seeing which projects can be delayed or cancelled, is expected to be held sometime in mid-June.
A report issued by the legislature’s Finance Committee gives a picture of the state’s current fiscal challenges, noting that recurring revenues for fiscal year 2020 “could decline about $370 million to $480 million below the December 2019 forecast.”
That drop is attributed not just to the COVID-19 impact, but a decline in oil and gas exploration, and the revenue that that activity brings into the state.
The report also notes that “given the extent of the anticipated revenue declines, the balance of the operating reserves,” which was previously estimated to be $259 million, will be insufficient to fund total fiscal year 2020 appropriations “without changes to spending or authorization to utilize another reserve fund.”
Using a modeling analysis, the Finance Committee report lays out the formidable fiscal challenges facing lawmakers by noting that “unlike most recessions, which are caused by either a demand or supply-side shock, national and state economies now face an unprecedented economic event causing supply and demand shocks simultaneously.”
The legislators will also be tasked with deciding whether to actually meet as usual in the state capitol or, because of COVID-19 distancing practices, conduct the session virtually.
By Garry Boulard
