Guv forced to scale back special session plans

Gov. Bill Richardson will have to scale back his plans for the special session of the Legislature that begins Friday because of falling oil and natural gas prices.

All agree there will be less money available than what forecasters projected in their previous revenue estimate. Several weeks ago, they projected that the state would have a $392 million windfall for one-time expenses and another $392 million for recurring expenses.

On Tuesday, the governor released a new revenue estimate that said the state will have a $225 million revenue windfall for one-time expenses and $351 million for recurring expenses. Because of that, Richardson announced in a news release that he will scale back his tax-rebate proposals. He plans to release a new proposal before the session begins.

“The bottom line is the state still expects $225 million in extra money — money that should go back to New Mexico families who are struggling to make ends meet,” Richardson said in the release. “I am confident we can put money in people’s pockets in a fiscally responsible way.”

But Sen. John Arthur Smith, D-Deming and chairman of the Senate Finance Committee, told The Santa Fe New Mexican that another preliminary estimate showed the windfall revenue for one-time expenses had fallen to between $100 and $150 million because of falling oil and natural gas prices.

Based on the previous estimates, Richardson had proposed rebates of as much as $150 plus $40 for each dependent for people making up to $60,000 per year. He also proposed a $200 million road-funding package, but the future of that isn’t clear.

Richardson still wants the Legislature to set aside $58 million in new, recurring funds for his already scaled-back health-care proposal, which aims to cover everyone under the age of 19.

But Smith told The Associated Press that a tax rebate “is about the only kite that will fly right now.”

The new revenue projections Richardson released on Tuesday were based on a number of factors including an average natural gas price of $9.60 for each thousand cubic feet and an average oil price of $122 per barrel. The previous forecast was based on oil prices of $134 a barrel and natural gas prices of $11.50 for each thousand cubic feet.