ALBUQUERQUE, N.M. (AP) — New Mexico is going to have to dig out of a deep financial hole as a result of the coronavirus pandemic, as gross receipts crater and a significant number of workers have been forced to seek jobless benefits, said one of the state’s top lawmakers.
Sen. John Arthur Smith, chairman of the Legislative Finance Committee, is urging caution as lawmakers and top officials from Gov. Michelle Lujan Grisham’s administration plan to gather this week to talk about shuttered businesses across the state, the pace of recovery and opportunities for tapping federal relief funds.
Smith said the state has experience dealing with economic volatility due to the ups and downs of the oil and natural gas market but that’s nothing compared to what is playing out now. The Democrat said in a statement ahead of the upcoming three-day meeting that restraint should be the theme for future spending given the uncertainty,
“Caution should be the byword for state budget drafters in the coming year, and restraint the theme for state agencies,” he said. “Indeed, caution and restraint should be the motif for all of us, at least for the near future.”
Legislative analysts are reporting that gross receipts are down across the state. That includes a 76% drop for receipts from the arts and recreation sector, a nearly 40% decrease for accommodations and food service, and more than 20% percent for other services like hair salons and auto repair.
Commerce stalled in March when the governor first imposed a stay-at-home order that forced the closure of all non-essential businesses. She proposed a systematic reopening of the economy based on factors such as the rate of spread and hospitalizations, with hopes of getting back on track in July.
While some restrictions were eased in June, the Democratic governor on Monday reimposed the prohibition on indoor dining at restaurants and limited the capacities at gyms, salons and other establishments. Masks also are mandated in the state, all visitors are required to quarantine for two weeks and only New Mexico residents are allowed at state parks.
In southeastern New Mexico’s oilfield, new drilling fell 64% in May compared with a year ago and the number of rigs working in the region fell from a peak of 117 in March to just four dozen in July.
Lawmakers met during a special session in June to address immediate fiscal concerns, but analysts and policymakers all agree that developing a responsible budget for the next fiscal year will be an even greater challenge as recurring spending is on track to outpace estimated revenues by more than $990 million.
The Legislative Finance Committee will be briefed on oil production in the Permian Basin, economic recovery and plans for reopening schools in the fall.
“It is a desperate time in our state and we are desperate to find answers and solutions on how to reopen our state’s economy, how to reopen our schools next month and how our college campuses will operate and educate students under COVID restrictions,” said Republican Sen. Steven Neville of Aztec.