State revenues from oil and gas production in New Mexico set a new record last year at more than $3 billion, helping to fund investments in education, public services, and infrastructure throughout the state.
According to a new report from the nonpartisan New Mexico Tax Research Institute both the General Fund and state schools benefited from $3.1 billion in oil and gas taxes and revenues. This total is a stunning $910 million increase from the year before and marks the first time that oil and gas revenues topped $3 billion.
“It’s only fitting that we start the new decade with yet another record-shattering year,” said Ryan Flynn, Executive Director of the New Mexico Oil and Gas Association, who stressed that the benefits of energy production supported programs throughout the state.
“While most New Mexicans may know that oil and natural gas are produced in Southeast and Northwest New Mexico, the benefits and contributions are felt statewide. From Taos to Anthony, and Gallup to Clovis, the impact of the industry’s success is visible in every community in New Mexico,” Flynn added.
Education is one area where energy tax revenues have made an outsized impact. New Mexico’s FY19 Operating Budget distributed $2.7 billion from the General Fund to local school districts. Of this money, $1.1 billion could be attributed to revenue from oil and gas production. The industry also contributed $303 million of an additional $769 million in state revenues that went to higher education.
Thanks in part to this surge in funding, New Mexico Governor Michelle Lujan Grisham unveiled a proposal to offer free college to all New Mexico high school graduates.
Both state and local government revenues showed significant increases, the report found. State revenue from federal land leases increased by more than $600 million—or 98 percent—largely because of unprecedentedly high bonus payments in during the fall of 2018, while revenues from General Fund taxes, Severance taxes, and Local Government taxes all increased by around 30 percent, a reflection of the increased value of oil and gas production.
All told, the oil and gas industry contributes approximately 39 percent of New Mexico’s annual budget. These funds are invested in public safety, infrastructure, education and other vital state programs.
Oil and gas production in New Mexico increased 28 percent in 2019 compared to the year before. Today’s production levels are now almost twice what they were in FY2017. Despite lower oil and gas prices, production is still a $20.5 billion industry in the state.
Those numbers are laying the foundation for the state’s future growth, says Flynn.
“New Mexico now begins the 2020s with strengthened public schools, expanded economic opportunities, and potentially the opportunity for every New Mexico student to get a college degree tuition-free,” he added. “As a state and an industry, our future is bright.
