Oil boom means extra $1.2 billion for New Mexico
Santa Fe New Mexican – To say New Mexico’s government will be operating in the black next year might be an understatement.
Economists expect the state will be flush.
A spike in oil production means the state could have as much as $1.2 billion in new money for the fiscal year that begins next summer. That is an 18 percent increase in revenue over current spending, according to a forecast presented to lawmakers here Wednesday.
Published by a group of experts from the Legislature and several state agencies, the report describes the projected increase in revenue as “astonishing.”
Such a windfall would give wide latitude for the next governor, who will take office in January. And most simply, it means the financial belt-tightening the state has seen in recent years is over, at least for now.
But the forecast also calls for caution, noting that most of this money is coming from an oil boom that is at the whim of the energy markets.
“We’re relying on the oil industry more now than we ever have before,” said Legislative Finance Committee economist Jon Clark.
In turn, the committee’s economists recommend the state build up its reserves to at least 20 percent of spending.
The state also faces significant financial problems, including major lawsuits over funding for public education and water rights. These cases could prove costly to resolve. Tax protests also cast uncertainty over just how much the state will raise in revenue.
Source: US Government Class
