Governor vetoes infrastructure bill as oil prices plummet

[Ponietz]

https://www.abqjournal.com/1429497/governor-vetoes-infrastructure-bill-as-oil-prices-plummet.html

“ SANTA FE — A global oil price war had New Mexico lawmakers and other elected officials on edge Monday, as a prolonged price crash could zap a recent revenue boom and cause a state budget surplus to evaporate.

“The uncertainty prompted Gov. Michelle Lujan Grisham to veto a spending bill that would have appropriated $49.5 million to fund 216 road projects statewide, including funding for bike paths, safety enhancements and median landscaping in Albuquerque.

“We do not yet know the degree to which (the coronavirus) and declining oil prices will impact our state’s economy,” Lujan Grisham wrote in her veto message of Senate Bill 232. “Given this uncertainty, I bear a heightened obligation to ensure that all significant expenditures constitute a demonstrably sound investment in New Mexico.”

“She also said the spending on road projects whose scope and total cost is often clear was not warranted given the uncertainty over the plummeting oil prices and other economic factors.

“Meanwhile, some legislators said the plunging oil prices, if they don’t bounce back, could force the state’s cash reserves to be significantly drawn down — just three years after they were all but depleted during a previous economic downturn.
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“If those numbers hold through June, it’s unstable,” said Sen. George Muñoz, D-Gallup, referring to the state’s current budget year.

”The stunning oil price decline also comes as Lujan Grisham is nearing a Wednesday deadline to act on a $7.6 billion budget bill — one that’s largely reliant on oil-generated revenue — that calls for a $536 million increase in year-over-year spending during the coming fiscal year.”