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The price of oil is hovering around $100 a barrel.In New Mexico, a resource-rich state, this might be seen as cause for celebration, even as we gasp at the gas pump. After all, it’s common knowledge that New Mexico benefits when the prices of oil and natural gas go up.But it’s a misperception to think a strong oil market – or even strength in the energy industry as a whole – can save the state from hard financial times. And there are many signs New Mexico is headed for hard financial times.Oil is up, but natural gas – which packs a more powerful economic punch – is down, along with gross receipts and income tax revenues.The housing collapse is starting to take a toll on the national economy, the stock market dove several hundred points over a few days, and locally we are losing jobs at our national labs and some of our biggest employers.Estimates of “new money” for the budget year that starts July 1 have dropped in the last few months from $450 million to about $370 million. That amount, about 6 percent more than we are spending this year, is perhaps enough to cover inflation in the costs of health insurance, utilities and the general business of running the government.It might even be enough to continue our efforts to improve public education and expand health care to more uninsured New Mexicans. But there are many new initiatives, including the spaceport and the Railrunner.And we are already seeing the impact of resources stretched too thin: Some highway projects in the package called GRIP I are being dropped to make room for the growing costs of other projects, and GRIP II is already short some $80 million.This cut in highway projects reflects both the negative impact of higher gasoline costs, closely linked to construction costs, and the impact of a slowing national economy, which prompts the federal government to cut back on its contributions to the states.After spending 60 percent of the state’s some $6 billion in general fund monies on education, 25 percent on health and human services, and most of the rest on law enforcement, prisons, environmental protection and the other functions of state government, state budget drafters will be hard-pressed to invest in new initiatives.At the same time, they must keep the state’s financial reserves high in case revenues come in lower than expected.It is possible the troubles we are seeing signal an economic wobble rather than the beginning of an economic slide, but we need to be prepared for some?thing more.The Legislative Finance Committee has been criticized for focusing too hard on financial warning signs. The committee tends to take a conservative approach to budget-making, often warning of the volatility of oil and natural gas revenue or of the risk in committing future funds.It’s an accusation that is certain to come up again this budget season.It might be that we are heading for a glancing blow rather than a head-on collision, but – either way – we should think about bracing for an impact.•Sen. John Arthur Smith is chairman of the Legislative Finance Committee and a Deming Democrat.