Analysts predict big state budget surplus, urge caution
TAOS — The interim Legislative Finance Committee heard the latest rosy budget projections on Wednesday, which show revenues from booming oil and gas activity leading to $1.17 billion in new money for the next fiscal year, bringing total revenue to $7.3 billion.
But analysts cautioned the surplus is the result of increasing reliance on oil and gas revenues — which are notably volatile. Because of this, they recommended setting aside at least 20 percent of the revenue in reserves in case of another crash in the oil and gas market or a recession.
Legislators will decide during next year’s legislative session what to do with the revenues.
In the past, when oil and gas prices fell, previous reserves weren’t enough to make up for the losses and legislators had to cut the state budget.
Read more: http://nmpolitics.net/index/2018/08/analysts-predict-big-state-budget-surplus-urge-caution/
