Federal Dependency, in One Table

Democrats in the House of Representatives have approved a General Appropriations Act for the upcoming fiscal year, which begins on July 1^st. The media are covering the plan’s spending priorities, and wonkier Errors of Enchantment readers can view the 191-page legislation here.

But one aspect of the budget is being ignored, though, and it’s a reality that should terrify the state’s taxpayers. The table above is taken from HB 2’s fiscal impact report. It shows that revenue from the federal government — the same government that has tens, if not hundreds, of trillions of dollars in unfunded liabilities — pays for a disturbingly high portion of state expenditures. Here’s how much D.C. covers spending in several major categories:

* Health, Hospitals, and Human Services (primarily Medicaid): 72.7 percent

* Transportation: 46.1 percent

* Other Education (regional education cooperatives, the Public Education Department, the Public School Facilities Authority): 22.6 percent

* Higher Education: 20.8 percent

So four of the General Appropriation Act’s accounts get at least a fifth of their revenue from the feds. (Agriculture, Energy, and Natural Resources just misses the cut, at 19.2 percent.) The biggest cost category, which includes healthcare coverage for the “poor,” is subsidized at a rate of nearly three-quarters.

That’s a fiscal relationship that cannot be sustained. Given the results of the 2016 presidential election and the makeup of New Mexico’s congressional delegation, don’t look for Trump administration officials and Republicans in Congress to be keen to subsidize the state at the rate to which it has become accustomed. All the more reason why the Land of Enchantment, at long last, must implement an economic-development strategy that fosters a vibrant, dynamic private sector.