Oil production boosts government income in New Mexico, as legislators build savings 'bridge'

abcnews.go.com:

Record-breaking oil production in New Mexico is likely to provide state government with a new multibillion-dollar surplus during the upcoming budget year

SANTA FE, N.M. — Record-breaking oil production in New Mexico is likely to provide state government with a new multibillion-dollar surplus during the upcoming budget year, economists for the state announced Wednesday.

Annual state general fund income would increase to $13 billion for the fiscal year that runs from July 2024 to June 2025 — a surplus of $3.5 billion, or 36%, over current annual general fund spending obligations, according to the forecast from lead economists at four state agencies including the Legislature’s budget and accountability office.

The estimates were presented to a panel of leading legislators Wednesday and set the stage for budget negotiations when the Legislature meets in January 2024, amid public concerns about crime, health care and the quality of public education in a state with high rates of childhood poverty and low workforce participation.

Annual oil production in New Mexico has more than doubled over the past five years, as the state became the No. 2 producer behind Texas. The energy industry delivered record-breaking income to the state over the past year through severance taxes and federal royalty payments, while the oil sector also bolstered government income linked to taxes on sales, corporate income and personal income.

“We are living in unprecedented and historical times in the state of New Mexico," said Wayne Propst, secretary of the state Finance and Administration Department, announcing state income projections.

Money is piling up in state accounts. Uncommitted general fund balances surpassed $4.3 billion on July 1, equal to