New Mexico experienced a record-setting year in terms of state revenues generated from oil and gas production, surpassing $3 billion.
This substantial increase of $910 million from the previous year has significantly benefited the General Fund and state schools, as reported by the nonpartisan New Mexico Tax Research Institute.
The unprecedented achievement of exceeding $3 billion in oil and gas taxes and revenues reflects a positive trend, contributing to investments in education, public services, and infrastructure across the state.
“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.
Energy tax revenues have had a substantial impact on the field of education in New Mexico, particularly evident in the Fiscal Year 2019 Operating Budget. Out of the $2.7 billion allocated from the General Fund to local school districts, $1.1 billion was attributed to revenue generated from oil and gas production.
Higher education also received a boost, with the industry contributing $303 million out of an additional $769 million in state revenues.
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.
The report also highlights significant increases in both state and local government revenues.
State revenue from federal land leases experienced a notable surge of over $600 million (98 percent), primarily due to exceptionally high bonus payments in the fall of 2018.
Additionally, revenues from General Fund taxes, Severance taxes, and Local Government taxes all saw approximately a 30 percent increase, reflecting the heightened value of oil and gas production.
In total, the oil and gas industry plays a crucial role by contributing around 39 percent to New Mexico’s annual budget.
These substantial funds are strategically allocated to support essential state programs, including public safety, infrastructure, and education.
The significant impact of the industry is evident in the remarkable 28 percent increase in oil and gas production in 2019 compared to the previous year.
Presently, production levels stand at nearly twice the amount recorded in FY2017. Despite fluctuations in oil and gas prices, the industry maintains its resilience, constituting a formidable $20.5 billion sector within 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.”
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