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LFC staff: budget growth slowing, childcare subsidy overspent and solvency planning launched
Summary
LFC staff told the committee the state faces widening long-term liabilities if current nonrecurring appropriations and earmarks continue; staff flagged a $40 million overspend in the new universal childcare subsidy, volatility in corporate tax receipts and proposed a stepwise 'solvency playbook' to protect reserves and prioritize high-value programs.
Charles, the Legislative Finance Committee director, told lawmakers on Feb. 20 that the post-session review shows New Mexico moving toward a more sustainable budget model even as several risks remain.
“The latest projections show this program is overspent by at least $40,000,000 and will finish the year basically overdrafting the general fund potentially,” Charles said, referring to the recently expanded childcare subsidy. He also told members that recurring base spending rose about 3.1% and that lawmakers have shifted many one-time appropriations and new pilot programs into the near-term pipeline.
Why it matters: LFC staff framed the discussion as one of timing and trade-offs. Much of the recent revenue strength is tied to energy and investment income that lawmakers are moving into permanent funds; that reduces the money available…
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