Ok, by now we all know that (subscription)…
Higher-than-expected revenues from oil and gas, as well as corporate and personal income taxes, will pump an estimated $720 million in extra money into New Mexico’s checking accounts.
Gov. Bill Richardson and the Legislative Finance Committee have recommended spending about $5.7 billion for the fiscal year that starts July 1. That’s up from $5.1 billion this year and would represent an 11 percent increase in state spending.
The “new money,” as lawmakers and bureaucrats call it, could go toward everything from tax cuts to higher state worker and teacher salaries to expanding pre-kindergarten, more state health care and dealing with overcrowded prisons.
Reread that last paragraph. What do you notice about all of those items? If you answered, that with the exception of tax cuts, they’re all recurring costs, you’re a winner.
Now, let’s put this into perspective. Imagine that at the end of last year your employer gave you an unexpected $720 bonus. Do you:
a) Take that $720 and buy something nice for $720.
b) Take some of the $720 and buy something nice and invest the rest for your future.
c) Commit to spend $720 every year from this point forward.
If you answered “a”, you better hope Social Security stays funded. If you answered “b”, they wrote about you in the book, The Millionaire Next Door. If you answered “c”, the bad news is that you’re fiscally irresponsible and most likely have a bankruptcy in your future. The good news is that you have a VERY promising future as a New Mexico politician.