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A Study in Contrasts: New Mexico's 2014 Financial and Political Picture

Abstract

As of spring 2014, the economic landscape in New Mexico was mixed though generally positive. State revenues were finally reaching pre-recession levels. The recession of 2008 was slow to hit New Mexico and slow to leave. Revenues declined significantly starting in February 2009 with oil dropping to $39.00 a barrel that month oil and gas income is a significant contributor to the state coffers). New Mexico was one of only six states to have fewer jobs in February 2011 than in 2010. Budget revenues declined steeply through 2008, 2009 and 2010. During the course of the recession, general fund revenues dropped 20% percent. Economic growth was not in positive territory until the spring of 2013. Since that time general fund revenues have climbed steadily. For Fiscal Year 2015, revenues are forecast at nearly $6.2 billion, a level not seen since 2008.. While economic forecasts are positive and the financial trajectory appears upward, underlying economic indicators provide a bit of uncertainly. Job growth is slow; government jobs are flat and private sector job growth is only about 1.4%. New Mexico is not projected to regain the previous peak number of payroll jobs until 2016, eight years after that level was first achieved.

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