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Lee County approves preliminary FY27 budget; staff proposes up to $101 million for permanent fund
Summary
The commission approved the FY27 preliminary budget and discussed a proposal and modeling to move up to $101 million into a permanent fund under New Mexico statute, with staff recommending predictable local government assistance funding.
Lee County commissioners voted to approve the county's preliminary FY27 budget and heard a detailed presentation on the county's permanent fund and multi-year projections that could allow as much as $101 million to be placed into the fund for FY27.
Interim Finance Director Anthony Dobbs presented the preliminary budget, noting that oil and gas production remains the primary revenue driver for Lee County and that recent price volatility is a forecasting risk. Staff outlined proposed changes including seven new positions beginning July 1, 2026 (totaling roughly $989,000), a 2.7% cost-of-living adjustment for most employees, and a multi-step compensation alignment. Dobbs said payroll and benefits changes and a state-mandated health insurance increase are key components of the budget picture.
Why it matters: The preliminary budget advances the county's financial plan to the state Department of Finance and Administration (DFA) and shapes staffing, compensation and capital spending for the coming fiscal year. Commissioners and staff discussed the budget's assumptions and the need to remain mindful of oil-price volatility.
Permanent fund proposal: County staff described the permanent fund established under New Mexico statute (cited in meeting as "6-6-19") and explained that principal can only be removed by public vote while interest may be used for operations. Staff presented a forecasting model that estimates roughly $101,000,000 could be contributed to the permanent fund this year while leaving an estimated $22,800,000 available for local government assistance in the preliminary budget model. Staff recommended adopting a forecasting cadence and a formula (for example, 5% of excess available cash) to provide predictable local-government assistance to municipalities, schools and other partners.
Commission response: Commissioners praised efforts to align pay ranges and retain employees, asked clarifying questions about assumptions and asked staff to continue refining projections. One commissioner said the compensation changes "bring everybody in line" and thanked staff for protecting employees from pay cuts while moving toward a step plan.
Next steps: By approving the preliminary budget, staff will transmit it to DFA and return to the commission on July 23 for final adoption. Staff will continue modeling permanent-fund scenarios and, if directed, will return with options for the commission to adopt a formula for local government assistance.
