NM’s K-12 funding faces several serious budget challenges IN ADDITION to oil/gas declines

The decline in oil and gas revenues and New Mexico’s reliance on them are well-documented. But, as this informative webinar “What will the financial turmoil mean for public education” points out, New Mexico faces some additional challenges relating to the crisis.

1. The decision under Gov. Richardson to exempt groceries from taxation (while raising taxes on everything else) is going to have negative impacts on revenue, especially at the local level. After all, groceries are some of the few items being sold in smaller, rural communities nowadays;
2. Sales (or in NM’s case) GRT is more volatile than other taxes. NM is 7th-most reliant on the GRT among all US states;
3. NM’s K-12 system is funded statewide to an extent unseen in any other state besides Vermont or Hawaii.  In most states K-12 systems rely on more stable property tax revenues. In New Mexico oil and gas and GRT play larger roles (oil and gas pay GRT as well).All of this means that Gov. Lujan Grisham needs to be extremely proactive in addressing the budgetary impacts of the current economic situation.