The Republican Party of New Mexico has learned that the budget solvency plan approved by the Democrat-led legislature is disingenuous and could lead to our reserves becoming the lowest in history.
When Democratic lawmakers approved the budget bill, they green-lighted taking $750 million in federal COVID-19 funding to help close the deficit. But use of this money must still be approved by Washington. It cannot be counted on yet.
So what did lawmakers do?
They put language in the recently passed budget bill stipulating that if that federal money is rejected, the legislature will dive into its reserves to recoup the lost $750 million. This, on top of $700 million tapped from our reserves to fix the 2020-21 deficit.
“Our lawmakers don’t tell us that federal COVID-19 dollars are not allowed. This is a sneaky way to continue to deplete our rainy day money as the progressives play their shell game to ‘fix’ our fiscal mess in New Mexico. The Democratic leadership is irresponsible, and taking more from our reserves will mean more fiscal pain down the road,” said Republican Party of New Mexico Chairman Steve Pearce.
This action is not only disingenuous—it is wrong. And dangerous.
“If the legislature grabs another $750 million from our reserves, we’ll have about $128 million left. That would be about the lowest ever,” said House Minority Leader Jim Townsend. “We’ve warned the Democratic leaders about their fiscal irresponsibility and further raiding our reserves would be devastating. These low reserves will likely result in a major tax hike next year.”
All this, as the legislature is expected to face another budget shortfall in January of about $2 billion.