New Mexico state budget

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New Mexico state budget

Flag of New Mexico.png
Budget calendar:  Annual
Fiscal year:  2015
State credit rating:  AA+ (as of May 2012)
Current governor:  Susana Martinez
Financial figures
GF expenses[1]:  $5.7 billion
All funds expenses:  $14.5 billion (FY 2013 estimate)
Spending % change:  Green Arrow Up Darker.svg3.96%[2]
% from federal funding:  36.61%
State debt:  $50,137,504,000
Per capita state debt:  $24,041
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in New Mexico, including:
  • a summary of the budget drafting process
  • trends in expenditures and revenues
  • current and past fiscal year budget developments
  • financial transparency measures

Between fiscal year 2009 and fiscal year 2013, New Mexico's total expenditures decreased by approximately $900 million, from $15.4 billion in 2009 to $14.5 billion in 2013. This represents a 6.2 percent decrease, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

New Mexico operates on an annual budget cycle, with each fiscal year beginning in July. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in July.
  2. State agencies submit their budget requests in September.
  3. Agency hearings are held in September and December.
  4. The governor submits his or her budget proposal to the New Mexico State Legislature on the first day of the legislative session.
  5. The legislature adopts a budget in February or March. A simple majority is required to pass a budget.

New Mexico is one of 44 states in which the governor has line item veto authority.[6]

The governor is constitutionally required to submit a balanced budget. In turn, the legislature is also constitutionally required to pass a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures**
New Mexico $5,656 $5,660 $3,227 $0 $14,543 $6,974.10
Arizona $8,567 $12,332 $7,624 $770 $29,293 $4,420.50
Colorado $7,942 $7,334 $13,203 $0 $28,479 $5,405.66
Oklahoma $6,892 $6,516 $7,878 $144 $21,430 $5,565.41
Texas $43,521 $33,147 $18,318 $1,939 $96,925 $3,664.71
**Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in New Mexico can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
New Mexico 19.7% 19.3% 0.5% 24.7% 2.0% 5.9% 27.9%
Arizona 19.0% 13.5% 1.0% 32.0% 3.6% 6.4% 24.6%
Colorado 25.3% 9.0% 0.0% 20.7% 2.7% 5.4% 36.9%
Oklahoma 16.5% 23.1% 1.0% 23.9% 2.5% 7.2% 25.8%
Texas 28.7% 15.8% 0.1% 30.1% 3.5% 8.1% 13.8%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, expenditures on elementary and secondary education, public assistance and transportation decreased. During that same time period, expenditures on higher education and Medicaid increased by one percentage point, a 5.5 percent increase in the share of the budget, and 3.9 percentage points, an 18.75 increase in the share of the budget, respectively. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 19.7% 19.3% 0.5% 24.7% 2.0% 5.9% 27.9%
2011 18.9% 17.8% 0.9% 22.9% 2.3% 5.2% 31.9%
2010 21.1% 18.0% 1.1% 22.1% 1.9% 8.8% 27.0%
2009 19.6% 17.5% 1.0% 20.5% 2.0% 8.3% 30.9%
2008 19.8% 18.3% 0.8% 20.8% 2.0% 7.0% 31.4%
Change in % -0.10% 1.00% -0.30% 3.90% 0.00% -1.10% -3.50%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
New Mexico $2,395 $1,210 $250 $69 $1,731 $5,655 $2,711.86
Arizona $3,822 $3,288 $688 $0 $785 $8,583 $1,295.23
Colorado $2,186 $5,642 $640 $13 $111 $8,592 $1,630.87
Oklahoma $2,087 $2,114 $452 $15 $936 $5,604 $1,455.37
Texas $25,992 $0 $0 $0 $21,289 $47,281 $1,787.68
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, New Mexico ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $2,395 $1,210 $250 $69 $1,731 $5,655 $2,711.86
2012 $2,363 $1,151 $281 $66 $1,958 $5,819 $2,792.84
2011 $2,267 $1,061 $230 $66 $1,847 $5,471 $2,632.92
2010 $1,685 $957 $125 $65 $1,967 $4,799 $2,323.99
2009 $1,902 $959 $163 $69 $2,228 $5,321 $2,647.70
Change in % 25.92% 26.17% 53.37% 0.00% -22.31% 6.28% 2.42%
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: House Bill 2

Fiscal year 2014

New Mexico state budget -- 2014
New Mexico State Legislature
Text:Bill 2
Legislative history
Introduced:January 16, 2013
House:February 21, 2013
Vote (lower house):53-16
Senate:March 12, 2013
Vote (upper house):42-0
Governor:Susana Martinez
Signed:April 5, 2013
Vetoed:Partial

Governor Susana Martinez proposed a $5.88 billion budget for FY 2014, which was a 4.1 percent increase from FY 2013. Education made up 44 percent of the new spending proposed, and total spending on Medicaid came to $932.8 million in the proposed budget.[14]

The FY 2014 budget was signed into law by the governor on April 5, 2013.[15]

Fiscal year 2013

Executive Budget Recommendation for FY 2013

Fiscal year 2012

See also: New Mexico state budget (2011-2012)

Fiscal year 2011

See also: New Mexico state budget (2010-2011)

Fiscal year 2010

See also: New Mexico state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in New Mexico ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $5,432 38.4% $3,124 22.1% $5,608 39.6% $0 0% $14,164
2010-2011 $5,231 36.5% $3,006 21% $6,110 42.6% $0 0% $14,347
2009-2010 $5,305 34.5% $3,961 25.8% $5,502 35.8% $605 3.9% $15,373
Averages: $5,322.67 36% $3,363.67 23% $5,740 39% $201.667 1% $14,628
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, New Mexico had a state debt of over $50 billion. Its state debt per capita was $24,041. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in New Mexico[18]
Type Totals U.S. rank
Total state debt $50,137,504,000 28
Per capita debt $24,041 7
State and other fund expenditures $8,556,000,000 7

Public pensions

See also: New Mexico public pensions and New Mexico public employee salaries

A 2012 report from the Pew Center on the States noted that New Mexico's pension system was funded at 72 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[19]

Taken together, the funding ratio for the state's pension systems decreased from 82.14 percent in fiscal year 2007 to 63.14 percent in fiscal year 2012, a drop of 19 percentage points, or 23.1 percent. Likewise, unfunded liabilities increased from roughly $4.5 billion in fiscal year 2007 to nearly $12.5 billion in fiscal year 2012.

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[20]

The table below lists the Standard and Poor's credit rating for New Mexico from 2001 to 2012 (grades from surrounding states are provided for additional context).[20]

S&P credit ratings from 2001 to 2012
New Mexico Arizona Colorado Oklahoma Texas
2012 AA+ AA- AA AA+ AA+
2011 AA+ AA- AA AA+ AA+
2010 AA+ AA- AA AA+ AA+
2009 AA+ AA- AA AA+ AA+
2008 AA+ AA AA AA+ AA
2007 AA+ AA AA AA AA
2006 AA+ AA AA- AA AA
2005 AA+ AA AA- AA AA
2004 AA+ AA AA- AA AA
2003 AA+ AA- AA- AA AA
2002 AA+ AA- AA- AA AA
2001 AA+ N/A AA AA AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[21]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[21]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
New Mexico 36.61% $5,171,367,000 9
Arizona 38.04% $10,394,549,000 8
Colorado 28.85% $6,310,538,000 35
Oklahoma 35.54% $7,363,043,000 15
Texas 34.51% $37,310,756,000 20

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, New Mexico received $2.52 billion in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[22]

Budget transparency

Transparency evaluation
NM Sunshine Portal
Searchability Y
600px-Yes check.png
Grants N
600px-Red x.png
Contracts Y
600px-Yes check.png
Line item expenditures N
600px-Red x.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries Y
600px-Yes check.png
Last evaluated in 2012.
See also: Evaluation of New Mexico state website and Constitutional provisions regarding reading of bills

Government tools

The table to the right is helpful in evaluating the level of transparency provided by the New Mexico Sunshine Portal.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for New Mexico, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[23][24]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. New Mexico tied for eighth in the nation with 12 other states, earning six out of eight possible points.[24]

New Mexico - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget
{{{1}}}
Multi-year forecasting N
600px-Red x.png
Annual cycle
{{{1}}}
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast
{{{1}}}
Nonpartisan staff
{{{1}}}
Constitution or statutory tax/spend limitations
{{{1}}}
(statutory)
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[24]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[25] According to the report, New Mexico received a grade of C+ and a numerical score of 77, indicating that New Mexico was "middling" in terms of transparency regarding state spending.[25]

Accounting principles

See also: New Mexico government accounting principles

The New Mexico State Auditor is required by law to conduct annual financial audits of all government agencies. The State Auditor’s Office administers a competitive process whereby audit firms may submit applications and proposals to perform financial audits of certain agencies. The Office of the New Mexico State Auditor is a constitutionally established office, allowing the state auditor to serve two consecutive four-year terms. The Audit Act, §§ 12-6-1 to 12-6-14, NMSA 1978, provides the laws in which the state auditor operates. Audit reports were not published online as of 2009.[26]

The state auditor has two statutory purposes:[26]

  • Ensure that the financial affairs of every agency shall be thoroughly examined and audited each year by the state auditor, personnel of the State Auditor’s Office designated by the state auditor or independent auditors approved by the state auditor.
  • Cause the financial affairs and transactions of an agency to be audited in whole or in part.

These two statutory purposes grant the state auditor the authority to conduct both financial and special audits.[26]

The Institute for Truth in Accounting (IFTA) rates New Mexico “worst” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and six states as worst. IFTA did not consider New Mexico's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care. New Mexico was "worst of the 6 worst," taking and average of 602 days to issue its CAFRs for FY 2005, 2006, and 2007.[27] New Mexico's CAFRs are prepared and published online by the New Mexico Department of Finance and Administration, Financial Control Division.[28]

Contact information

New Mexico Department of Finance and Administration
407 Galisteo Street
Santa Fe, NM 87501
Phone: 505-827-3638
Fax: 505-827-4330

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. Office of the Governor, "2014 Budget in Brief," January 10, 2013
  15. New Mexico Legislature, "2013 Regular Session: HB 2," accessed April 30, 2014
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. Pew Center on the States, "Widening Gap Update: New Mexico," June 18, 2012
  20. 20.0 20.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  21. 21.0 21.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  22. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  23. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  24. 24.0 24.1 24.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  25. 25.0 25.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  26. 26.0 26.1 26.2 New Mexico State Auditor Website, accessed November 1, 2009
  27. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  28. New Mexico Department of Finance and Administration, Financial Control Division Website, accessed November 1, 2009