Democrat Patty Lundstrom, Chair of the Legislative Finance Committee, had an opinion piece in the Albuquerque Journal in which she discussed New Mexico’s economic and budget situations. For starters, as the title states New Mexico’s economy is still on shaky ground. As Lundstrom notes, “To put it simply, a strong national economy is lifting up our state and, hopefully, the trend will continue and even increase.”
This is an interesting admission coming from a leader of the Party that controls the Legislature (but no branch of the federal government of which she writes admiringly). It begs the question, “What policies do Democrats in the Legislature have in mind to spur economic growth?” Shockingly, Lundstrom states “we can no longer cut our way to prosperity we (the Democrats) proposed $426 million in revenue enhancements.”
So, Lundstrom seems to be arguing that what New Mexico’s admittedly “shaky” and inadequately diversified economy needs are tax hikes!!!??? That’s despite the relatively strong revenue picture which reduces or even eliminates the immediate need for higher taxes. Amazing. And this is not some “back bencher,” Lundstrom is one of the most powerful (and supposedly knowledgeable) members of the entire Legislature.
Again, New Mexico is by no means out of the economic woods yet. We can agree with Lundstrom on that. But raising taxes as Lundstrom and her Democrat allies wanted to do in 2017 and apparently still want to do is not going to help the New Mexico economy grow. Of course, it is worth noting (yet again) that New Mexico is relatively big-spending state.
In looking at the state and local spending as a percentage of state GDP (article link), NM spends a staggering 27.14%. Only two states spend a higher percentage: Alaska and Mississippi.
These figures include federal “pass-through” funds managed by the state government, chiefly medicaid. New Mexico receives a very generous federal match because of its poverty. Also, probably included are federal highway funds, such as those dedicated to the ART project in Albuquerque. If federal “pass-through” funds are excluded from all states, New Mexico would be close to the national average in state and local spending as a percentage of gross state product.
If federal funds are included in “state and local spending” it would be appropriate to disclose this.
Fair enough. Thanks for pointing it out. I consider spending to be spending regardless of the source because New Mexico like other states attempts to mold its government in order to suck up more federal revenue, but you are factually correct.