New Mexico 2024: Swinging the Compass. Recalibrating Fiscal Policy to Plan for a Slower Economy

In late February 2024, the New Mexico State Legislature closed the books on a relatively uneventful session. After successive years of record revenues and double-digit budget expansion, the legislature modestly reigned in spending increases to less than 7%. Legislators continued their recent trend of stashing some of the state’s massive surplus in newly created endowment funds, hoping to insulate the state from future economic downturns. The legislative action reflects a growing consensus that boom and bust budgeting does not provide for a stable, long-term financial future. Legislators still managed to approve a $10 billion dollar plus budget, set aside reserves upwards of 30%, and spend almost $1.4 billion in capital projects big and small. Though the 30-day session is short, lawmakers still found time to deal with some social issues (public safety, health care, education, and the environment) and some issues personal to the legislature. Though only 72 pieces of legislation passed, the legislature managed to reset the compass on New Mexico’s financial structure while tinkering with current social concerns.