Oil production helps provide New Mexico revenue boost
June 25, 2019 05:18 PM
ALBUQUERQUE, N.M.- A new report from the state’s Legislative Finance Committee shows general fund revenues are “tracking” above the forecasted amount.
“It's great news for the state of New Mexico,” said state Rep. Javier Martinez.
"We do have to be cautious though,” he added. “This is a lot of non-recurring, one-time revenue so we got to be smart and judicious about how we invest it.”
The seven-page handout states a majority of the new money is due in part to an increase in oil production and gross receipts tax.
Martinez told KOB 4 that the money could be used for a number of things including infrastructure and education.
“Infrastructure continues to be an issue in New Mexico – roads, bridges, dams…those are ideas we wanted to be invested in. Of course there are a lot of these social programs that we also have to invest in things like early childhood education and K-12 public education,” he said.
“When including revenues from the emergency oil and gas school tax in excess of the five-year average, which flow to general fund reserves, revenues are tracking about $370 million above the forecast,” according to the report.
”Naturally the projections are encouraging. We'll see where we end up later this year,” said Tripp Stelnicki, Director of Communications for Gov. Michelle Lujan Grisham.
“No question the governor is excited about the opportunities represented by a potential surplus -- this could mean a permanent funding stream for early childhood education, continued investment in rural and urban economic development, public safety and infrastructure improvements and so many more,” he added.
Preliminary information provided to lawmakers shows that New Mexico oil production is up 46% this fiscal year.
Other areas that showed strong growth include wholesale trade, retail trade and real estate, according to the report.
Additionally, the Workforce Solutions Department reports New Mexico added 13,000 jobs between April 2018 and April 2019.
Officials are expecting more than a $1 billion surplus for the fiscal year which ends this weekend.
Speaker Brian Egolf sent the following statement:
“The latest revenue report reflects more good news for the people of New Mexico. Last session, we launched our moonshot for education, invested in bricks-and-mortar projects for communities all over the state, and laid the foundation for a more secure economy. With revenue coming in higher than projected this year, I will work with my colleagues in the House and Senate and with our Governor to continue our education moonshot and other needed projects.
I want to invest the money we have wisely so that we can see the results – excellent schools for our children, great-paying jobs for New Mexicans with opportunities for advancement, clean air and water, and a state that will be the envy of the nation.”
House Republican Leader James Townsend (R-Artesia) said:
“We should use this money to invest in New Mexico. Projects like road improvements and rural broadband will have a multiplier effect on our economy and should be prioritized.
“But as our state’s budget ebbs and flows with the fortunes of the oil and gas industry, we should avoid using this money to permanently increase the size of our state government to unsustainable levels. That scenario will set up future generations for failure.
“Additionally, with revenues growing we hope this puts to rest continued talk about raiding the permanent fund to pay for new government programs.”
Sen. Stuart Ingle, leader of Senate Republicans, warned:
“The legislature needs to be very careful in how any additional tax dollars are spent. If they are spent on expenses that will occur year after year, taxpayers now need to realize that they will be the ones who have to foot the bill in the future for these reoccurring expenses when the price of oil and gas can no longer sustain such high year-after-year spending. While we may be gushing with money now, let us use some restraint and caution so we aren’t in a position to have to cut back on programs when tax dollars dry up.”
Created: June 25, 2019 05:18 PM
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