The 2016 legislative session is four months away, but it’s not too early for New Mexico’s solons to think seriously about fiscal restraint.
Field production of crude in New Mexico more than doubled between 2007 and 2014. But the boom, at least for now, is over. ConocoPhillips is laying off workers, and in August alone, the state lost 1,000 jobs in the mining sector, which includes oil and gas. Goldman Sachs thinks oil may drop to as low as $20 per barrel. And as the U.S. Energy Information Administration noted this week, “upstream investment is highly sensitive to changes in oil prices”:
But wait, it gets worse. The state’s Medicaid bill keeps rising. Yesterday the Albuquerque Journal reported that “226,783 of … newly eligible adults have enrolled in the program” since Governor Martinez expanded it in 2013.
Legislators from both parties never tire of floating big-spending initiatives, from “infrastructure” projects to economic-development schemes to “universal preschool.” But it’s looking more and more like revenue declines and runaway Medicaid expenditures will enforce budget discipline during next year’s session.