New Mexico Economic Development and Revenue Strategy slide image

New Mexico Economic Development and Revenue Strategy

The Eventual Decline in Oil and Gas Revenue ⚫ While predictions of the specific timing of industry peaks are just that - predictions - at some point, State oil and gas revenues will begin to decline permanently. • The State's Consensus Revenue Estimating Group estimates that oil and gas revenue will decline to 10 percent of General Fund revenue by 2050. Given historical volatility and long-term trends, a decline in revenue could begin much sooner, and there is no guarantee that it will occur in a linear fashion. • The CREG and LFC staff acknowledge that many factors could contribute to a future shock to the industry, including recessions, environmental or geopolitical crises, changes to federal regulatory policy, or technological innovations. ♦ In other words, no matter which scenario one looks at, there is a significant risk in the continued reliance on oil and gas revenue. Doing so could lead to outyear revenue gaps that worsen the State's recurring revenue structural deficit. © PFM 17
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