New Mexico revenue tracking higher than expected, report says

Apr. 17—State lawmakers got a pinch of good financial cheer from a Legislative Finance Committee report that said New Mexico collected over $350 million more in revenue than expected in late 2023.

Ismael Torres, the committee's chief economist, joked it was a case of "no news is good news." He said the state will have more money than predicted by the end of fiscal year 2024.

When it comes to oil and gas revenues, which made up some but not all of the new money, he told lawmakers, "We are on track to where we were last year."

Sen. Roberto "Bobby" Gonzales, D-Ranchos de Taos, called the report "good news."

Others on the committee agreed, particularly because Torres late last year produced a report saying state revenues were coming in below budget for the first time in three years, based on an August forecast.

The forecast pointed to a likely end to the record-high revenue growth that has fattened state coffers in past years and led Gov. Michelle Lujan Grisham and the Legislature to increase the state budget by 13% two years in a row.

The new report, covering July through November, noted total oil and gas revenues going into the general fund have not grown "as much as it may seem."

That's because some oil and gas revenue and federal mineral leasing royalties that go into the general fund are capped each year.

Once that cap — $2.79 billion for fiscal year 2024 — is reached, those revenues instead go into the state's Early Childhood Trust Fund, the Severance Tax Permanent Fund and the Tax Stabilization Reserve.

The cap for the current year is not expected to be reached until later in 2024, the report says.

Revenue from gross receipts tax, corporate income tax and state investment funds helped bump up the increased revenue, the report says.

Rep. Nathan Small, D-Las Cruces, who chairs the House Appropriations and Finance Committee, said after Wednesday's presentation he sees "positive economic news and an opportunity for wise investments" in the report.

Sen. Michael Padilla, D-Albuquerque, voiced a more cautious view, saying, "It's a little too early to figure out the long-term forecast" based on the report.