Quay County Sun - Serving the High Plains

Citing budget concerns in the wake of plunging oil prices, New Mexico Gov. Michelle Lujan Grisham last week vetoed a $50 million transportation-projects bill that earmarked $215,000 for a roadway maintenance vehicle for Tucumcari.

The governor in the same week also line-item vetoed about $110 million worth of capital-outlay projects throughout the state for the same reasons, though $2.06 million in Quay County projects emerged unscathed from those cuts.

Quay County manager Richard Primrose said Thursday morning he printed out and double-checked Lujan Grisham’s veto list to make sure local projects survived the cuts.

“These were needed projects, and I’m glad the governor didn’t veto them,” Primrose said.

Tucumcari city manager Britt Lusk said last month the $215,000 from the transportation bill was earmarked by state Sen. Pete Campos (D-Las Vegas) to get a pothole machine for the city. Lusk said the city already has a such a machine, and “there are other things we have a greater need for” in street maintenance. He said he had hoped to get more clarification on what the appropriation could be used for, but the bill’s veto made that moot.

An email to Lusk last week requesting comment was not returned.

Senate Finance Committee Chairman John Arthur Smith, D-Deming, told NM Political Report last week the plummet in oil prices last week was due to a “perfect storm.” A dispute between Saudi Arabia and Russia led to slashed prices and an increase in production by the Saudis. The oil industry also was seeing reduced worldwide demand because of the ongoing coronavirus pandemic.

State Sen. Pat Woods (R-Broadview) long had been cautioning the state Legislature to be more cautious with its spending. But he admitted the rapid drop in oil prices caught him and other lawmakers by surprise.

“We didn’t see oil dropping out of bed,” he said in a phone interview Wednesday. “That’s what causing all the problems in the budget.”

Woods said lawmakers earlier this year passed this year’s $7.6 billion budget assuming an oil price of $52 a barrel. The price dropped into the low $30s last week and into the high $20s on Monday morning.

The senator said each $1 above or below the $52-a-barrel baseline affects the state budget by $17 million to $22 million. A $20-per-barrel decrease would mean an impact of up to $440 million.

He said the drop in oil prices also would have a compounding effect on the state’s economy in employment and gross-receipts taxes. Woods said each oilrig in the southern New Mexico employs about 100 people.

“If that oil patch starts shrinking, that’s going to kill us,” he said. “I guarantee they’re laying off people today in that oil patch.”

The $2.06 million in main capital-outlay projects funded in Quay County are:

• Tucumcari sewer infrastructure improvements, $300,000;

• Arch Hurley Conservancy District canal maintenance equipment, $100,000;

• Mesalands gymnasium floor renovations, $100,000;

• Mesalands Community College nurse’s aide and phlebotomy facility renovations, $75,000;

• Mesalands Community College robotics and computer programming equipment, $35,000;

• Quay County Fairgrounds roof replacement, $350,000;

• Logan heavy equipment purchases and equipment, $200,000;

• Logan water system improvements, $550,000;

• San Jon water storage tanks, Phase II, $350,000.

Among the local capital-outlay projects funded by general-obligation bonds are:

• Logan Senior Center renovations, $40,000;

• Logan Senior Center vehicles, $48,109;

• Mesalands Community College student center renovations, Phase 2, $425,000.

The general-obligations bill funded more than $195 million in projects statewide and weren’t affected by Lujan Grisham’s vetoes. Voters will decide on whether to issue those bonds in the November election.