When the New Mexico legislature convenes on January 17 for its 2023, 60-day regular session, lawmakers will have a projected revenue of just under $12 billion to allocate when crafting the state’s 2024 FY (fiscal year) budget. New Mexico’s 2024 FY runs from July 1, 2023 – June 30, 2024.

The Consensus Revenue Estimate of $11,994,000,000 for FY 2024 was released by the New Mexico Legislative Finance Committee (NMLFC) in mid-December. A significant portion of this projected revenue is the result of healthy Permian Basin oil and gas production to which Lea County and other oil-rich southeastern New Mexico counties are major contributors. 

The almost $12 billion dollar figure for FY 2024 is up about $3.6 billion from the FY 2023 budget, “…a 42.7 percent growth…,” states an article published in the Carlsbad Current Argus. In simple language, $12 billion breaks down to approximately $1,500 for each of New Mexico’s 2.2 million inhabitants, says University of New Mexico economist Reilly White.

State Revenue Increasing Each Year

New Mexico’s revenue keeps going up each year. In FY 2022 the amount was $9.675 billion, and in FY 2021 it was $8.085 billion.

According to New Mexico Taxation and Revenue Secretary Stephanie Schardin Clarke, the upward trend indicates that the state remains in a “solid position fiscally”. Clarke states in an article published by the New Mexico Political Report, “The strong revenues we’ve seen over the past couple of years allowed us to deliver significant tax relief to New Mexicans and still maintain historically high reserves to protect against unforeseen shocks.”

Governor and Lawmakers Want to Assure Better Lives for New Mexicans

Newly re-elected Governor Michell Lujan Grisham wants to use the state’s healthy revenues to better the lives of all New Mexicans. Improving public education – often ranked by national reports as the worst or almost the worst in the nation – and curtailing childhood poverty are at the top of the governor’s list of priorities. Lujan Grisham is also a proponent of putting rebate checks in New Mexicans’ pockets.

Specifically the governor on Tuesday, January 10 recommended using state income to “…underwrite health insurance costs for educators, expand minimum classroom instructional hours at public schools and shore up access to health care and high-speed internet in remote areas…,” states an AP article posted at KOAT.com. 

Lujan Grisham also recommended that $1 billion be allocated for tax rebates – up to $1,500 per household – and tax cuts of $500 million, reducing “some income tax rates” and lowering “…statewide gross receipts taxes on sales and services,” states the AP.

State Senator George Muñoz (Dem. – Dist. 4) agrees with the governor. Quoted by the Santa Fe New Mexican, Muñoz says that the FY 2024 revenue provides lawmakers “big time” opportunities to improve conditions for all residents of the Land of Enchantment. According to an AP news report, Muñoz feels that the state has “…a unique opportunity to make investments that expand economic opportunity and rein in dependence on petroleum production in the future. ‘No one in this state has ever had this opportunity,'” states Muñroz. “‘We can really set this state up to not be dependent on oil and gas.'”

Newly elected Second Congressional District Representative Gabe Vasquez (Dem.), whose district includes portions of Hobbs and Lea County as well as most of the southern portion of the state, is on record as acknowledging how important the energy industry is to the state. He states in an article posted at CurrentArgus.com, “‘Truly, we all depend on it. I’m going to fight to make sure that workers are being paid what they deserve, that their health, the health of their families are protected and that they have a future for generations to come in places like Carlsbad, places like Hobbs.'”

At the same time Vasquez states his concern for the long-term well being of the state. He sees valid opportunities through job creation and investment for both the oil and gas industry and the renewable energy sector to work in tandem to assure the safety and health of the future generations of New Mexicans.

Other New Mexico lawmakers agree with Vasquez. State Sen. Steve Neville, (Rep. – Dist. 2) is on record as stating that unless New Mexico starts attracting industries other than oil and gas “‘…our revenues will plummet fairly quickly'”. State Sen. Bill Sharer, (Rep. – Dist. 1), agrees. He wants “real, honest, serious, attractive tax reform” to assure long-term stability for all New Mexicans.

Still, the oil and gas industry remains key to the state’s healthy economy. On its Facebook page the New Mexico Oil and Gas Association (NMOGA) notes that the state’s fossil fuel industry, with more than 134,000 employees, is responsible for “one-third of the total annual state budget.” Funds provided by the oil and gas industry support New Mexico’s schools, healthcare, infrastructure and first responders states the NMOGA.