Dems reap oil billions, but their ‘green’ agenda trying to sink the state’s fortune
New Mexico’s financial strategy to safeguard and grow its wealth from local oil production is yielding significant returns, with state investment income now surpassing personal income tax revenue for the first time, according to a recent fiscal forecast. However, this progress is unfolding against a backdrop of mounting efforts by far-left Democrats to dismantle the state’s oil and gas sector through initiatives like the so-called “Energy Transition Act,” New Mexico’s version of a Green New Deal, which was passed in 2019.
For the fiscal year spanning July 2024 to June 2025, the state’s revenue from its two multibillion-dollar permanent funds and interest on treasury accounts is projected to reach $2.1 billion. This figure edges out the $2 billion anticipated from personal income taxes. The rise in investment earnings is intended to sustain crucial public programs — such as childcare subsidies and socialized “free” college — even as New Mexico faces potential declines in oil revenue due to the push for a shift to so-called “green” energy.
Meanwhile, legislators have revised the state’s income tax brackets, lowering residents’ taxes in the nation’s second-largest oil-producing state, behind Texas.
These figures serve as a foundation for budget negotiations when the Democratic-controlled Legislature convenes in January.
The state’s financial growth remains deeply linked to oil production, which continues to drive revenue increases at a more moderate pace. However, this growth exists in tension with legislative priorities, including far-left energy policies to curb fossil fuel reliance. Efforts like the Energy Transition Act have been criticized as a direct attack on New Mexico’s oil and gas industry, threatening a vital sector supporting the state’s economy.
Economists predict New Mexico will see a record-setting $13.6 billion in general fund revenue for the fiscal year running from July 2025 to June 2026, reflecting a 2.6% increase from the prior period. This surge leaves room for an additional $892 million in state spending, representing a 7% increase. In total, the state’s general fund income is expected to exceed its core annual spending obligations by a staggering $3.4 billion.
Recognizing the windfall, lawmakers are exploring new savings initiatives to safeguard against future economic uncertainty. One proposal would create a $1 billion trust to support mental health and addiction treatment services, responding to growing public concern about crime and homelessness. Lawmakers may also revisit a proposal to establish a trust for Native American education — all cutting into oil and gas funding.
While the economic gains are undeniable, “progressive” energy policies like the Energy Transition Act risk eroding New Mexico’s economic foundation. The act, which aims to transition the state away from fossil fuels, could ultimately jeopardize funding for the very social programs lawmakers are striving to protect. The state’s oil and gas sector not only fuels public revenue but also supports tens of thousands of jobs, a fact that some believe the far-left faction of the Democrat Party has overlooked in its pursuit of environmental goals. Futile efforts to “go green” risk undercutting the very prosperity that is now enabling increased social spending, tax cuts, and trust fund expansions.
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