The 2025 New Mexico legislative session began on January 21 and ends on March 22, 2025. It is projected that legislators will have $892.3 million in “new money” available in 2025. The increased revenue provides a unique and historical opportunity to invest in major capital improvement projects to improve the state’s quality of life.
On December 13, Governor Lujan Grisham released her proposed budget for Fiscal Year 2026. The budget recommendation is $10.9 billion in recurring spending which is an increase of 5.3% over last fiscal year. The Governor’s budget includes $3.33 billion in reserves (30.4%), through FY26 while the State has $10.9 billion in recurring spending.
On January 15, the Legislative Finance Committee (LFC) released its proposed budget to compete with Governor Lujan Grisham’s budget. It calls for spending $10.8 billion from the state’s general fund, a 5.7%, or $577 million, increase. The LFC overall proposed budget is slightly less than the Governor’s proposed budget.
The governor’s plan calls for a total budget of $10.9 billion in recurring spending while the LFC’s competing budget is $10.8 billion and increases spending by $568.5 million.
The Governor’s proposed budget and the LFC’s budget will now be debated. A compromise between the two budgets will be hammered out and likely be arrived at quickly given the closeness in amounts of the budgets. It is disappointing that both budgets are limited as to what should be done with the historic revenue surplus other than placing the surplus in trust accounts. Absent from the Governor’s and the LFC’s proposed budgets are significant proposals for capital improvement projects using the historic revenue surplus.
Whenever surpluses in state revenues occur, fiscal conservatives always begin to salivate and proclaim all taxation is bad, that rebates are in order and that tax reform is the only way to spend the surplus. The tired and old political dogma is tax revenues are the people’s money and any excess of what is needed over, and above essential government services should be returned to the taxpayer. It is a short-sighted philosophy believing that only essential, basic services such as public safety should be funded. If that were the case, there would be no public libraries, no museums, no zoos, no mass transit expansions and no capital improvement projects benefiting the public.
What all too often that is totally ignored because lack of revenues are major capital outlay projects that are for the benefit of the general public and that will improve the overall quality of life. The revenue surplus should be spent on major capital improvement projects that can go a long way to improving the quality of life for all citizens. Major infrastructure needs such as roads and bridge repair, funding for wastewater projects, dams and acequia projects, job creation endeavors, economic development programs, should all be topics of discussion during the 2025 legislative session.
The Governor recently made the absurd announcement that she wants to move the NM State Fair to a new location without identifying a new location nor cost to rebuild. She suggested that the property be used in part for affordable housing which in no way is the highest and best use for prime commercial property. Nothing is mentioned in the Governor’s nor the LFC’s proposed budget on moving the State Fair. Past feasibility studies suggest the cost to relocate and rebuild will be upwards of $1 Billion.
The Albuquerque Downs Racetrack and Casino occupies a quarter of the state fairgrounds and both are not going anywhere because of existing long term leases. The highest and best use of the 236 acres of State Fair property is the creation of a State-owned Entertainment and Commercial Hub but with no affordable housing with the Downs and Casino being a major component. An Entertainment and Commercial Hub would revitalize the entire SE Heights and surrounding area creating all new commercial property areas for shops, restaurants, theaters and entertainment venues. It would also likely spur extensive housing redevelopment East and South of the area.
Redevelopment plans for the existing State Fair property include the building of a new, modern arena that would support year-round large-scale concerts and events replacing the aging and deteriorating Tingly Coliseum. A multipurpose event center with a capacity of at least 20,000 has long been a dream of many elected officials. Building of a multipurpose state-of-the-art arena to replace Tingly Coliseum is an investment for future generations. It’s a capital improvement project that should go forward regardless of what happens to moving Expo New Mexico.
Pete Dinelli is a native of Albuquerque, a licensed New Mexico attorney, and a former public official with 27 years of state and municipal service. He publishes a blog on New Mexico politics at www.PeteDinelli.com.
