Citing the threat of potential revenue shortfalls, New Mexico Gov. Michelle Lujan Grisham (D) trimmed nearly $110 million worth of public works projects from the state’s budget on March 11. The move follows the governor’s veto of a separate $50 million transportation spending measure earlier in the week.
One of the nation’s poorest states, New Mexico has benefited from a sustained petroleum boom over the past few years. Production in 2019 reached nearly 328 million barrels, more than double 2016’s output.
However, the coronavirus coupled with an escalating price war between Russia and members of the Organization of Petroleum Exporting Countries could soon force cuts in both production and the resulting stream of revenue to state coffers. Before the price war erupted, New Mexico was projected to have reserves of nearly $1.7 billion available when the current budget year ends in June.
But current trends led Grisham to delete approximately 530 projects from the budget for the fiscal year beginning in July. Cuts include improvements to schools and social services facilities, tribal building repairs, road renovations and street signs.
With the final budget providing $180 million for highway construction and repair work statewide, the governor justified her veto of the separate transportation bill by citing the proposed projects’ “unclear” scope and final costs. Among the casualties is a proposed $1.3 million widening of Albuquerque’s Paseo de Norte corridor.