Enchantment State News

New Mexico’s over-reliance on oil and gas revenue is in danger after plunging oil prices, and larger losses on Wall Street have dominated the news. 

This comes as Gov. Michelle Lujan Grisham is expected to sign the New Mexico budget and questions have been raised. The recent price cuts see the oil price fall to $35 per barrel, a move that will affect both oil producers based in Permian Basin and the state revenue, according to New Mexico House GOP.

House Republican Leader, Jim Townsend, touched on this issue.

“During the session, we constantly raise the alarm that it was inevitable a bust in oil prices would occur," Townsend said. "Unfortunately, Santa Fe progressives refused to listen and spent without any restraint and raised taxes as if the oil boom would last forever.”

He said House Republicans produced a budget alternative that would have provided a cushion against economic uncertainty, however, they are entirely shut out and accused of "not understanding" the budget.

Rep. Rebecca Dow also gave her thoughts on this topic.

“The budget that was passed speculated oil prices would be somewhere around $50 a barrel, yet the oil market is now in a global upheaval,” Dow said. “I wish the progressives had been more conscientious in protecting our reserve funds and been more cautious in how they spent the surplus. No one in this state looks forward to re-living the budget nightmare we had just a few years ago when declining oil prices ended with our schools suffering the most in our spending cuts.”

The plummeting oil prices come after years of a fierce campaign to end the oil and gas industry by New Mexico Democrats. Despite efforts to oppose this industry, it has contributed to the state’s economy and currently accounts for 45 percent of the state revenue.

House Republican Whip Rod Montoya said the governor, together with the legislature, is walking New Mexico on the edge of the severe budget problem.