Pub. 17 2020 Issue 3

6 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S EXECUTIVE VICE PRESIDENT’S MESSAGE JOHN W. ANDERSON, EXECUTIVE VICE PRESIDENT New Mexico Bankers Association T he 2021 Legislature is sched- uled to open at noon on January 19 for 60 days. The real ques- tion is, will the next session be virtual or live? As of now, the State Capitol is closed to the public, and many legislators and other public officials are predicting the next session of the Leg- islature will be virtual. For the first time in our history, the state capitol was closed to the public during the 2020 June Special Session due to the pandemic. The state Supreme Court upheld the Legislature’s decision to close the capitol to the public by a narrow margin, 3-2. New Mexico is not alone in the decision of how to proceed with the 2021 session. According to the National Conference of State Legislatures, only 21 state capitols are open to the public. The remaining 29 state capitols are closed to the public. In New Mexico, the legislative committee’s web- casts and floor proceedings will be available to the general public. It is through technol- ogy that we will be able to testify as expert witnesses — not ideal by any means. Economy The number one issue before the leg- islature each year is the preparation and passage of the budget. Some good news came recently. State finance gurus recently announced an overall more positive outlook for the state’s financial forecast in June. Of course, there are many unknowns, includ- ing the timing and substance of a possible federal stimulus package and the economic impact of the spread of COVID-19. Economists forecast an improved reve- nue outlook for Fiscal Years 2021 and 2022 versus the group’s June estimate. For Fiscal Year 2021, the September forecast reve- nue range is $460 million to $1.35 billion higher than the June estimate. For Fiscal Year 2020, revenues are tracking more than $500 million better than the June estimate. The improved revenue projection suggests total general fund reserves will grow to about 29.4% of recurring appropriations, or $2.1 billion, at the end of Fiscal Year 2020. Record-high reserves are an essential back- stop to provide flexibility amid uncertain and difficult fiscal circumstances. Thus, New Mexico is in a good position to weather the current economic downturn and public health crisis. 2021 Legislative Issues State Bank: We anticipate that there will be legislation introduced in the 2021 Legislature to create a New Mexico state bank. There have been attempts to autho- rize a state bank in the past — most recently in 2011. Some of the considerations which we have recommended the Legislature consider are: • Will any prospective benefits that come from a public bank outweigh the nega- tives? The potential risks of public banks are many, but a scattered business focus, lack of expertise in loan origination, undue political influence and lack of oversight are essential considerations. A public bank will not have the depos- it insurance that consumers expect, meaning that their deposits would be 2021 LEGISLATURE New Mexico is not alone in the decision of how to proceed with the 2021 session. According to the National Conference of State Legislatures, only 21 state capitols are open to the public.