Eddy County, Carlsbad budgets grow thanks to gross receipt taxes from oil and gas
Interim operating budgets for the 2025 fiscal year passed by the City of Carlsbad and Eddy County await approval from the State of New Mexico.
The budgets are spending plans for services provided by both government entities during the upcoming fiscal year which starts July 1, 2024 and ends on June 30, 2025.
The New Mexico Department of Finance and Administration (NMDFA) requires interim budgets arrive in Santa Fe by June 1 and become final when reconciled by June 30, noted the NMDFA website.
A closer look at the City of Carlsbad's interim budget
“The City has a solid fiscal year ’25 budget,” said Wendy Austin, interim city administrator. "The City has a total fiscal year 2025 revenue budget of $148 million."
Carlsbad’s City Council passed the temporary spending plan May 14 and expects a $200,000 increase in revenues from the current 2024 fiscal year, said City of Carlsbad Finance Director Melissa Salcido.
She said the City of Carlsbad anticipates gross receipts tax (GRTs) collections to increase to $5.7 million per month during the new fiscal year.
More: City of Carlsbad passes 2024 $81M spending plan
Austin said 46% of Carlsbad's total revenue are from GRTs.
"In addition, the City has been awarded $36 million, or 24% of the total revenue budget, of state and federal grant funds. Other revenue sources include a portion of the property tax that the County collects, Lodgers Tax, and service fees for water, sewer, and garbage pickup," she said.
GRTs are sales taxes collected from businesses in New Mexico, according to New Mexico Taxation and Revenue Department (NMTRD).
Salcido said labor costs increased nearly 7% from fiscal year 2024 as the city gave a 3% pay raise to all employees.
She said operating costs should decrease $6.5 million during the 2025 fiscal year from the current fiscal year as loans for water and sewer projects were paid off.
She said operating costs decreased $6.5 million during the 2025 fiscal year from the current fiscal year as loans for water and sewer projects were paid off.
She said operating costs decreased by $6.5 million during the 2025 fiscal year from the current fiscal year as loans for water and sewer projects were paid off.
Eddy County's 2025 interim budget increases from 2024
Passed May 7 by Eddy County’s Board of County Commissioners, the short-term budget increased $29 million from the 2024 fiscal year budget, said Eddy County Finance Director Breanna Shields.
She said Eddy County forecasted an increase for all revenue sources in 2025, including GRTs.
Shields said Eddy County increased the threshold from GRTs collected from $2.8 million a month in fiscal year 2024 to $3.2 million monthly in 2025.
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Through March of this year, Eddy County collected $50.7 million in GRTs after budgeting collections at $33.7 million for 2024.
Shields said the Finance Department budgeted GRTs from oil production based on the price of a barrel of oil estimated by West Texas Intermediate (WTI) which stood at $69 in 2025.
Eddy County based oil production GRTs in 2024 based on a WTI price of $65 a barrel.
Oil and gas tax collections are another large funding source for Eddy County government as more than $82 million in taxes were collected through March of this year, read county financial data.
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At the start of the current fiscal year, Eddy County’s Finance Department budgeted oil and gas tax collections at $52 million.
Shields said a balanced general fund of $146 million was projected for Eddy County during fiscal year 2025.
Mike Smith can be reached at 575-628-5546 or by email at MSmith@currentargus.com.
This article originally appeared on Carlsbad Current-Argus: Gross receipt taxes bolster Eddy County, Carlsbad budgets
