State revenue soars, led by surging oil production - Albuquerque Journal

State revenue soars, led by surging oil production

Copyright © 2018 Albuquerque Journal

SANTA FE – New Mexico revenue collections are continuing to soar after several cash-lean years, prompting Gov. Susana Martinez to assert on Wednesday that efforts to grow and diversify the state’s economy are paying off.

“As we keep up the fight to reform our tax code, make our economy more competitive for jobs and investment – and veto every tax increase – our economy is growing and families and businesses are taking home more money to grow, save, and invest for the future,” the two-term Republican governor said.

Overall revenue for the current budget year was up through January by $672 million – or about 13 percent – over the same time period a year ago, according to state Taxation and Revenue Department figures.

The numbers, which include both state and local government revenue collections through the first seven months of the budget year, show a recent growth in both personal and corporate income tax revenue, among other sources.

However, roughly 70 percent of the state’s revenue uptick is due to a surge in oil production in southeast New Mexico, according to the Legislative Finance Committee. The LFC also pointed out local governments, including Albuquerque and Santa Fe County, recently approved increases in their gross receipts tax rates.

Meanwhile, an influential lawmaker said the governor’s claim of broad economic prosperity might be premature.

“We’re still heavily, heavily reliant on the fossil fuel industry in the state of New Mexico,” said Senate Finance Committee Chairman John Arthur Smith, a Deming Democrat. “We’re on the roller coaster of oil and gas.”

Smith also suggested that Martinez, who is barred from seeking a third consecutive term as governor, might be trying to bolster her legacy in her final year in office.

The governor has pushed for an overhaul of New Mexico’s tax code, favoring a plan to reduce the gross receipts tax base rate by eliminating dozens of allowable exemptions and deductions. But that plan has failed to gain traction in the Democratic-controlled Legislature.

Instead, Martinez last year vetoed a $350 million tax increase package the Legislature had approved to help plug a gaping budget hole. Lawmakers ended up enacting sweeping budget cuts and depleted the state’s cash reserves to balance the budget.

Since then, the state’s revenue outlook has improved dramatically and cash reserves have been largely replenished. The state is projected to have roughly $612 million in reserves when the new budget year starts in July.

The turnaround has been largely driven by a Permian Basin boom. New Mexico now ranks third nationally in oil production, and the bulk of the increase in state gross receipts tax collections has been due to activity in three energy-rich counties – Lea, Eddy and San Juan.

James Jimenez, the executive director of New Mexico Voices for Children, a nonprofit group that’s advocated for more state spending on early childhood programs, said New Mexico faces stark challenges such as high unemployment and poverty rates despite the recent revenue rebound.

“Less than one year ago, lawmakers were scrambling to pay for basic services like schools, roads and public safety,” said Jimenez, who previously worked as chief of staff for former Democratic Gov. Bill Richardson.

“New Mexico has become too reliant on the oil and gas industry to fund these services, which has created boom-or-bust cycles for our economy and, therefore, for all New Mexicans,” he added. “Right now we’re in a boom time, but we mustn’t forget that the bust times may be right around the corner.”

A report last year from the Pew Charitable Trusts ranked New Mexico as the seventh-highest state in terms of revenue volatility – Alaska ranked the highest, and South Dakota the lowest – over a recent 20-year period.

More Journal Polls

Home » Journal North » Journal North Recent News » State revenue soars, led by surging oil production


Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

1
Over the decades, special shaped balloons have grown into ...
From the newspaper
In October 1989 a flying saucer ... In October 1989 a flying saucer was spotted over the afternoon skies of Albuquerque.Th ...
2
All you need to know to survive Balloon Fiesta
Balloon Fiesta
SURVIVAL GUIDE ... SURVIVAL GUIDE ...
3
Balloon Fiesta daily schedule 2022
Balloon Fiesta
Here's the schedule for the 2022 ... Here's the schedule for the 2022 Balloon Fiesta. All events are dependent on weather.
4
First fiesta launched with 13 balloons and grew into ...
Balloon Fiesta
When KKOB radio personality Bob Clark ... When KKOB radio personality Bob Clark sits at the microphone, broadcasting his morning show live fro ...
5
Music has been part of the Albuquerque International Balloon ...
Balloon Fiesta
Music has been part of the ... Music has been part of the Albuquerque International Balloon Fiesta for decades.At fir ...
6
A 50th souvenir: This year’s official poster features Looney ...
Balloon Fiesta
Turning 50 is a big deal ... Turning 50 is a big deal and to commemorate the event, the Albuquerque International Balloon Fiesta ...
7
‘Like a family reunion’
Balloon Fiesta
Despite being a member of the ... Despite being a member of the longest-serving vendor of the Albuquerque International Balloon Fiesta ...
8
It’s the big ‘5-0’ for Albuquerque International Balloon Fiesta
Balloon Fiesta
Light the candles, slice the cake, ... Light the candles, slice the cake, pop open the champagne and offer up a toast.It's th ...
9
These behind-the-scenes volunteers help make the fiesta work
Balloon Fiesta
Putting on an event as extensive ... Putting on an event as extensive and as time consuming as the Albuquerque International Balloon Fies ...