Lea and Eddy counties continue leading in contribution to state revenue, study says
Lea and Eddy counties remained the No. 1 and No. 2 New Mexico counties contributors to New Mexico's coffers, according to a revised study commissioned by Eddy County and prepared by the Arrowhead Center at New Mexico State University (NMSU) in Las Cruces.
Arrowhead Center Program Director Kramer Winingham said Los Alamos, Bernalillo and San Juan counties rounded out the Top 5 list of counties making significant funding contributions to the state budget.
The report analyzed the State of New Mexico’s county-level revenues and expenditures from 2015 through 2022, estimating the amount of revenue contributed to the state by each county and the state’s spending in each county on a per capita basis.
The study updated two previously released studies of contributions between 2015 and 2019 and 2015 through 2022, Winingham said.
In the most recent report, Lea County contributed $250,000 per person, while the state expended $35,000 per person. Eddy County contributed $239,000 per person with $32,000 of expenditure per person, according to the study.
San Juan County, a natural gas-producing county that recently saw the closure of a coal generating facility and a decline in oil extraction operations, contributed $30,000 per person and had $26,000 expended by the state per person, according to the study.
More: NMSU study shows Eddy County top contributor to state government
“You know we’re boom or bust. We kind of wanted to show that,” said Eddy County Public Works Director Jason Burns who spoke during Winingham’s presentation Dec. 5 before the Eddy County Board of County Commissioners.
Burns said Eddy County’s oil market did not suffer much during the COVID-19 pandemic and in 2023 the county’s oil and gas business has seen an uptick in business.
Revenue collected from oil and gas operations during the 2024 fiscal year are ahead of original projections and behind last year’s collected oil and gas tax revenue, said Eddy County Finance Director Breanna Shields. In October, the county collected $6.7 million from oil and gas activities, for business that was conducted in July, according to Shields.
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She said the price of West Texas Intermediate (WTI) Sweet Crude Oil has fluctuated this year, from $69.79 to $81.55 per barrel, according to data from the U.S. Energy Information Administration (EIA). WTI prices for December are around $75 a barrel.
New Mexico predicts more revenue for fiscal year 2025
In August, the New Mexico Department of Finance and Administration (NMDFA) forecasted $3.48 billion in “new money” for the state’s general fund for 2025, according to a news release from the agency. The new money is a 3.5% increase in recurring revenue for fiscal year 2023, according to NMDFA.
“The robust general fund proves that what we are doing in New Mexico’s economy is working,” Gov. Michelle Lujan Grisham said. “As we see another record year of projected revenue, we will continue building a solid financial future for our state through meaningful and long-lasting investments, always with an eye on stewardship of public dollars and fiscal responsibility.”
A New Mexico Legislative Finance Committee (LFC) fact sheet estimates that oil and gas contributes 25% to 30% of the total state revenue.
“Although that figure fluctuates depending on economic conditions and the health of the energy industry. Generally, a dollar increase in the per barrel price of oil translates into about $45 million for the general fund, while a 10 cent increase in the price per thousand cubic feet of natural gas translates into $27 million in additional revenue,” the fact sheet read.
State Rep. Jim Townsend (R-54) said the study could give southeast New Mexico legislators, most Republicans in a Democrat controlled body, some bargaining power in the upcoming legislative session.
"The industries of oil and gas and agriculture are doing real well. Southeast New Mexico is blessed with great resources," he said. "We have some great companies working in Southeast New Mexico and they do a super job of perfecting their performance."
The 2024 New Mexico Legislature enters its 30-day session Jan. 16.
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Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com or @ArgusMichae on X, formerly known as Twitter.
This article originally appeared on Carlsbad Current-Argus: Study: Lea and Eddy counties lead in contributions to state revenue
