New Mexico's legislative finance committee is sounding the alarm on rising economic uncertainty, with the likelihood of a recession increasing to between 30% and 40%, according to Chief Economist Ismael Torres. During a recent House Taxation and Revenue Committee meeting, Torres provided insights into the shifting economic landscape, noting that consumer confidence has declined significantly over the past two months, contributing to instability in markets.

The committee discussed the implications of these economic trends, particularly in relation to proposed tax credits aimed at alleviating the financial burden on low-income residents. Torres confirmed that lower-income individuals tend to spend a larger share of their income, suggesting that such tax relief could stimulate economic activity.

The meeting also highlighted broader concerns about the impact of federal economic policies on state planning. Representatives expressed that the current federal economic policy gyrations are complicating efforts to create a stable environment for both consumers and businesses in New Mexico. This sentiment was echoed by multiple committee members, who noted that various industries, including oil and gas and airlines, are adjusting their first-quarter outlooks due to decreased consumer spending expectations.

In total, the committee has reviewed 31 tax-related bills, with 16 temporarily tabled for further consideration. As the session progresses, the committee aims to navigate these economic challenges while ensuring that any proposed policies foster stability and growth in New Mexico's economy. The next steps will involve careful monitoring of economic indicators and potential adjustments to forecasts as necessary.