Last week it was announced that the State of New Mexico (thanks in large part to booming oil and gas production) has a $1.2 billion surplus. Yes, this is good news and here are some takeaways:
1) Gov. Martinez was 100% right to ignore the calls for tax hikes.
2) Despite the positive budget news, New Mexico is still not recovered from the Great Recession. As the chart below shows, we are one of three states still “under water” in terms of jobs since the Great Recession: 3) New Mexico is already a big-spending state. As a percent of GDP, New Mexico spends far more than any of its neighbors. And, not surprisingly, New Mexico also lags far behind its neighbors in terms of jobs and population growth. More spending on K-12, pre-K, and even on programs like LEDA and JTIP is not the answer to developing the State’s private sector economy beyond oil and gas.
Soon, what should be done with the surplus?