The next session of the New Mexico state legislature will begin Jan. 16, 2024, in Santa Fe with a record $12.7 billion in tax revenue. Santa Fe New Mexican reported, “State lawmakers will once again head into the legislative session with record oil production in New Mexico pumping up tax revenue to its highest level ever.” The state’s oil production grew to 658 million barrels in fiscal year 2023 from 531 million barrels in FY2022.
State officials said the industry accounts for 40 percent of the state’s annual revenue – funding education, social services, infrastructure and other programs. The growth rate is slowing, however. Revenue increased by only $700,000 from $12 billion this year.
John Lonergan, CEO of Permian Petrochemical, told the New Mexican that 40 percent is a conservative estimate of the industry’s contribution to state tax revenue; some research shows it’s closer to half. He said the industry already must deal with many regulations, and he raised the question of how much more is needed. “New Mexico’s laws on methane emissions and pollution are the toughest in the U.S.,” he said. “We’re No. 2 in oil production and are much more stringent than No. 1 Texas or No. 3 North Dakota.”
Jim Peach, economics professor emeritus at New Mexico State University, told the New Mexican that the state should develop more big-revenue industries so it’s not so reliant on the oil and gas industry.