New Mexico's oil income investments now surpass personal income tax revenue
For the first time, New Mexico’s investment income is expected to surpass its revenue from personal income taxes
SANTA FE, N.M. — Efforts by New Mexico to save and invest portions of a financial windfall from local oil production are paying off as state government income on investments surpasses personal income tax collections for the first time, according to a new forecast Monday.
General fund income from the state's two, multibillion-dollar permanent funds and interest on treasury accounts is expected to climb to $2.1 billion for the fiscal year between July 2024 and June 2025, surpassing $2 billion in revenue from personal income taxes.
The investment earnings are designed to ensure that critical programs — ranging from childcare subsidies to tuition-free college and trade school education — endure if oil income falters amid a possible transition to new sources of energy.
At the same time, legislators this year revised personal income tax brackets to lower taxes in the nation's No. 2 state for oil production behind Texas.
“We’re not a poor state anymore,” said Democratic state Sen. George Muñoz of Gallup. “We’ve got things that we can win on — free education, childcare… low taxes for working families, for children. And that’s all because we’ve done a lot of the work to set this up for the future.”
The comments came at a legislative panel Monday where economists from four government agencies announced an income estimate for the coming year. The figures are the baseline for budget negotiations when the Democratic-led Legislature convenes in January.
State government income, which is closely linked to oil production in New Mexico, continues to grow, though at a slower pace, as legislators discuss new investments in
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