Eddy County oil and gas tax collections exceed budgeted expectations in 2023
Vigorous tax collections from oil and gas activities benefitted Eddy County government as collected revenues outpaced budgeted revenue by 117 percent, according to data from the County Finance Department.
Eddy County Finance Director Roberta Gonzales said the County collected an overall $280 million in tax revenues through January of this year. When the 2023 fiscal year started July 1, 2022, county staffers anticipated budget revenues at $238 million.
Tuesday, she reported to the Eddy County Board of County Commissioners the county collected over $10 million in oil and gas revenues for the month of January.
More:Eddy County projects revenue windfall for 2024 based on past tax collections
Gonzales said taxes on oil and gas equipment contributed to the January revenue along with high oil prices.
Eddy County bases its projections on prices per barrel of West Texas Intermediate (WTI) sweet crude oil prices, according to Gonzales.
The Chicago Mercantile Exchange (CME) indicates WTI is the world’s most liquid contract.
Gonzales said January’s oil and gas tax collections were from business conducted in Eddy County’s oil and gas fields during the month of October.
According to the U.S. Energy Information Administration (EIA) WTI crude oil prices in October ranged from $83.63 to $92.64 a barrel.
Gonzales said tax collections for the final five months of the fiscal year could drop slightly as WTI prices have fallen since October 2022.
EIA noted WTI prices in November varied from $90 a barrel to $77 a barrel. WTI prices hovered around $71 a barrel to $80 a barrel from December through February, according to EIA.
Through January, Eddy County collected $76.3 million in oil and gas tax collections and budgeted $39.5 million in collections for 2023, read Finance Department data.
More:Eddy County oil and gas collections near $10 million despite drop in oil prices
EIA predicts oil and liquid fuels production worldwide to average 101.5 million barrels a day in 2023 up 1.6 million barrels a day from 2022.
Gonzales said Eddy County used only 61 percent of its budgeted $296 million for expenses through January.
Gross receipts tax collections remain consistent
Gonzales said Eddy County collected $4.3 million in gross receipts taxes (GRTs) in January.
GRTs collected in the County during the 2023 fiscal year were well above $4 million as $31.7 million total was collected, according to the Finance Department.
Eddy County originally budgeted GRT collections at $26 million when writing up the 2023 budget last year.
GRTs are an extensive funding source for Eddy County government along with oil and gas tax collections.
More:NMSU study shows Eddy County top contributor to state government
The New Mexico Taxation and Revenue Department (TRD) said GRTs in New Mexico were collected from various sources including, including property sales, property leases or licenses and selling research and development services performed outside of the state, when the product is initially used in New Mexico.
Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on Twitter.
This article originally appeared on Carlsbad Current-Argus: Eddy County exceeds budget forecasts with large oil tax collectons
