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SANTA FE — New Mexico finance and taxation officials said Thursday they’re standing by their revenue forecast as lawmakers continue negotiations in an effort to hammer out a plan for financing public schools and state government.
With a special legislative session looming Monday, the debate over spending cuts and tax increases in the Legislature has turned into a fight over revenue projections with the executive branch.
Several lawmakers have said the forecasts backed by Gov. Bill Richardson’s administration are overly optimistic and could result in the Legislature coming back in the fall to plug another shortfall. Lawmakers already are grappling with a $600 million deficit.
Taxation and Revenue Secretary Rick Homans said executive branch economists met Thursday and again concluded the forecast is on track. He dismissed lawmakers’ concerns, saying they appear to be based on incomplete information about revenue from personal and corporate income taxes.
“Stronger natural gas prices are helping the revenue picture, while gross receipts taxes and personal and corporate income taxes continue to produce as we expected,” Homans said in a statement.
Sen. John Arthur Smith, D-Deming, who heads the finance committee, said the economists “better be right.”
“We’ll go with those revenue estimates and I suspect we’re going to know by the November election whether we’re even in the ballpark or not,” he said.
Smith said he’s most concerned about the state’s estimates for natural gas and gross receipts revenues and the sustainability of those revenues.
The most recent forecast — developed from economists representing the Legislature and the Taxation and Revenue Department, Department of Finance and Administration and the Department of Transportation — anticipates revenue for the 2011 fiscal year to be $5.12 billion.
That’s about a 6 percent growth in revenues; some lawmakers said they believe revenue growth could actually be half of that.
Homans said gross receipts taxes for the first six months of the current fiscal year are $3 million below target, but oil and gas severance taxes brought in $12.3 million more than anticipated.
Lawmakers failed to pass a state budget during the regular 30-day session that ended Feb. 18. They were stalled by several unpopular proposals — from trimming government spending to raising gross receipts taxes on goods and services and taxes on certain foods and cigarettes.
The special session was initially scheduled to start Wednesday, but Richardson gave lawmakers a few more days to work out their differences.
Like Richardson, Finance and Administration Secretary Katherine Miller said Thursday there was no reason for lawmakers to wait to pass a budget.
“We have the information to develop a budget now, as we have every year,” Miller said. “If certain legislators have personal concerns, they can propose contingencies to address those. They aren’t a reason to delay the entire process.”
Senate Republican Leader Stuart Ingle of Portales said he was hopeful lawmakers and the executive branch can come to some sort of agreement before the special session.
“Unfortunately, sometimes we’ve been right more than we’ve been wrong,” said Ingle, a 25-year legislative veteran.