ALBUQUERQUE, N.M. — State financial analysts say an expected boost in personal and corporate taxes is helping to offset weak oil and natural gas prices, providing for a more stable revenue outlook for New Mexico.
The latest estimates show that revenue for the current fiscal year is expected to increase by $136 million to $6.25 billion as compared with a February forecast.
“Oil and gas revenues have stayed steady, but the real strength is the income taxes,” said Abraham Sanogo, a Legislative Finance Committee economist.
Analysts are trying to figure out what’s driving the uptick in those taxes but say it’s generally attributable to the improving economy.
They caution that the estimated increase in revenues doesn’t equate to new money that could be available to spend in fiscal 2017 because hard numbers won’t be available until after July 1, the start of fiscal year 2016.
Gov. Susana Martinez in April signed a $6.2 billion budget for the next fiscal year, which folded in about $83 million in new money that lawmakers got to spend despite plunging oil and gas prices.
An August 2014 forecast had pegged new revenues at about $285 million, which dropped to half of that in December, then to $83 million in February.
Also in August, all energy production, including oil and natural gas and other mineral products, was estimated to bring in $1.17 billion in revenue for fiscal 2015. In February that projection was downgraded to $970 million.
The analysts’ February forecast already took into account low energy prices, and the latest estimates show an increase in income taxes.
“The increased strength in broad-based taxes has offset the weakness in energy-related revenues,” according to a financial report shared Tuesday with lawmakers who sit on the Legislative Finance Committee.
“Since energy prices continue to be below the level of the February estimate, these revenue sources will continue to weaken in the remaining months of FY15. The strength in broad-based taxes is expected to continue to offset the weakness in energy-related revenues,” the report says.
The next revenue estimation will be in August.