The Associated Press
SANTA FE — The Legislature should save $200 million of the state’s revenue windfall by depositing it in a permanent fund that will generate money to pay for future needs, House Republicans said Thursday.
The Legislative Finance Committee is advocating a similar move but is recommending the transfer of $125 million into the Severance Tax Permanent Fund, which provides a yearly distribution of money for financing general government operations and public education.
The state is enjoying higher-than-expected revenue collections mostly because of taxes and royalties on oil and natural gas production.
A group of GOP leaders and budget committee members said at a news conference that the Legislature should not spend all available revenues in the upcoming budget year.
“We’re going to help the governor make sure that this is not a feeding frenzy,” said Rep. Larry Larranaga, R-Albuquerque.
Gov. Bill Richardson has recommended that about $100 million from next year’s available revenues should be stockpiled in the state’s cash reserves so the surplus money can help cover state needs in the 2008 fiscal year.
An estimated $529 million is available for budget increases and to help offset tax cuts in the upcoming 2007 fiscal year, which starts July 1.
Besides that money, the state expects this year’s revenue collections will be more than $500 million higher than what had been projected when the current operating budget was approved. Part of that will likely be spent on one-time projects and capital improvements.
House Republicans said the Legislature should focus some surplus revenues on statewide projects, such as putting $200 million into a trust fund that finances water projects, $350 million for state and local roads and building improvements for public schools and colleges.
House GOP Whip Terry Marquardt of Alamogordo called for $300 million for a pipeline to move water from a basin in southern New Mexico to areas lacking adequate fresh water supplies.
Republicans also may push for a budget provision to cap spending on a proposed commuter rail project by the Richardson administration and require long-range plans on costs for the rail proposal and other potentially expensive programs such as pre-kindergarten.