New Mexico Revenue Windfall
Wednesday, August 13, 2008 at 09:40PM 
Lawmakers in New Mexico are meeting this week to decide how to spend the projected windfall coming into the state due to higher oil prices. New Mexico is the sixth largest oil-producing state in the U.S., with a monthly production of around 5 million barrels. Taxes and royalties on oil and gas extraction in the State were expected to be around $400 million dollars higher than last year, but the recent decline in oil prices now suggest that $225 million dollars in new money will be available. On the table is a one-time tax rebate of $163 million dollars to help New Mexico families as they struggle with higher energy costs.
It sounds good until you realize that over the past year, the rise in gasoline prices alone has taken more than one billion dollars out of New Mexico’s consumer economy. You can't actually move your economy forward by giving public resources to companies that sell them back to you at enormous profit, even if you tax them and occasionally give taxpayers a rebate.
Reader Comments (2)
Given the current political atmosphere, and probable jerry-rigged legal restrictions of which I am currently ignorant, it may be totally naive to suggest that the windfall be used to start (not study, not debate) building alternative energy infrastructure. The situation does, however, stimulate us to think about how our communities could generate revenue that can be used to move to clean energy and keep a local economy stimulated. Pipe dreams right now, but I plan to dream on.
Right on, Rebecca. The high tax rates on petroleum in Europe, which we so smugly ridicule, were put in place after the oil embargoes of 1973 and 1979 in recognition of the government support needed to build alternative energy infrastructures. In fact, the reason oil and gas taxes are called "severance" taxes is to remind us that once it's gone, it's gone!
Thanks for commenting, - Mark.