New Mexico Economic Development and Revenue Strategy
Recent Estimates Show Continued Reliance on Oil and Gas Revenues
The New Mexico Legislative Finance Committee (LFC) staff and Consensus Revenue
Estimating Group (CREG) conducted the State's first formal long-term analysis of the
General Fund in July 2022, with a heavy focus on severance tax revenues.
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In a review of mid- to long-term revenue options, LFC staff projected that strong oil
production will be maintained at least through the next 10 to 15 years. While LFC
analyzed long-term trends, they did not create a projection of actual revenues beyond
FY 2026.
However, the recent spike in State revenues is "baked in" to the State's short-term
baseline forecasts. Thus, growth that is slower than trend in the out years still results in
substantially increased aggregate net revenues over a medium-term horizon.
The group did, however, conclude that at some point before FY 2050, revenue growth
will dip below the ten-year historical trend and encouraged careful consideration of
spending of recurring funds so that appropriations don't exceed revenue in the long-
term.
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