A new analysis from the nonpartisan New Mexico Tax Research Institute reports state revenue from oil and natural gas production in New Mexico totaled $2.8 billion in FY20, accounting for 33.5 percent of total state spending, the New Mexico Oil and Gas Association (NMOGA) said in a news release.
Despite lower commodity prices throughout the spring of 2020, record production kept oil and gas revenue at the second highest total ever reported, the news release said.
“The oil and gas industry continues to be the key driver of New Mexico’s economy, delivering for New Mexico in a significant way despite the challenges we’ve all encountered during this unprecedented public health crisis,” said NMOGA President Ryan Flynn.
Of the $2.8 billion, $2.376 billion was allocated to the state budget for recurring spending, $192 million for non-recurring spending and $232 million for reserves. Federal mineral leasing, the target of several proposals to restrict domestic oil and gas development, is the single largest source of oil and gas revenue to the state at nearly $809 million, NMOGA said.
The report notes that the decline in oil and gas revenue from FY19-20 stems from an “abnormally high level reached in FY19 due to one-time [federal] bonus payments.”
Public schools are the largest beneficiary of oil and gas revenue, taking in nearly $1.1 billion of the total. Spending for health and human services is second with more than $640 million, while higher education is third with just over $290 million. Bernalillo County is the largest recipient of funding, with more than $409 million in K-12 and higher education funds supported by oil and gas. The University of New Mexico is the largest higher education recipient at nearly $69 million.
In Doña Ana County, oil and gas revenue supported 6,375 jobs, paid $299 million in labor income, added $425.6 million to the county’s economy and provided $185.24 million for education, including $119 million in K-12 funding and $65.1 million in higher education funding. New Mexico State University in Las Cruces received more than $57 million, NMSU-Alamogordo received $2.45 million, NMSU-Carlsbad received $1.545 million, Doña Ana Community College received more than $8 million and NMSU-Grants received nearly $1.2 million. Las Cruces Public Schools received more than $71.8 million, Gadsden Independent School District received almost $42 million and Hatch Valley Public Schools received almost $3.9 million. Charter schools in Las Cruces received more than $4 million in funding.
“Every New Mexican relies upon the oil and gas industry to put teachers in our public schools, keep first responders ready to help, and to ensure healthcare resources are available to thousands of our neighbors,” Flynn said.
New Mexico is the third-largest producer of oil and the eighth-largest producer of natural gas in the United States. In 2019, New Mexico oil and gas production set new highs, topping 330 million barrels of oil, and more than 1.8 million cubic feet of natural gas.
To view NMOGA’s full report visit www.nmoga.org/fuelingnewmexico.