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Saturday, October 24, 2009
Oil, Gas Tax Revenues Fall by $100M
By James Monteleone
The Daily Times
SANTA FE — More than $100 million in lost state revenues paid by the oil and gas industry during the first quarter of this fiscal year underscores the role the energy industry plays in supporting the state budget.
The State Land Office this week reported $90 million was collected through oil and gas royalties and land lease payments made between July and September. The revenues represented less than half of the $194 million paid to the state during the same three-month period last year.
The lost revenues mirror the oil and gas slowdown statewide as commodity prices of both natural gas and crude oil dropped from record highs last year to record lows amid the weakened economy, said John Bemis, assistant land office commissioner for oil, gas and minerals.
"It's not like it's a shortfall or a downturn or plummeting revenues. We're just a barometer for the price," Bemis said. "We're just now seeing prices back into a normal form. Those (high prices) were probably unsustainable."
At least a third of the state budget is paid by the oil and gas industry, Bemis estimated.
Maintaining continually strong commodity prices over several years, the New Mexico state Legislature grew to expect the high tax payments and royalty returns from the oil and gas industry, said state Sen. Steve Neville, R-Aztec.
As a result, the windfalls were incorporated in the growing budget. State leaders now are considering ways to pay for a $650 million budget deficit, created in part by the oil and gas industry slowdown.
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