State Budgets: New Mexico Moves From Surplus to Shortfall

January 8, 2009

A year ago, New Mexico Gov. Bill Richardson (D) estimated that the 2009 $6 billion budget would be $369 million in surplus, and urged that this “new money” be spent wisely. A year later, that 6.5% spending growth turns out to have been a bad idea with that same budget now in a $454 million shortfall. Revenues aren’t expected to hit $6 billion again until 2012. Richardson has thus far refused to consider rolling back income tax cuts that went into effect in 2003, which reduced revenues by $400 million per year. There was some speculation that things might change when Richardson resigned to take a Cabinet post, but he recently withdrew himself from consideration for that job. In the meantime, there seems to be confusion about the extent of the current pay freeze for government workers.

More on New Mexico here.

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