Driven by rapidly-increasing oil production in the Permian Basin, New Mexico’s strong revenue growth continues. The Albuquerque Journal recently ran a story highlighting the impact on the State’s Permanent Funds which have grown rapidly in recent years and are now valued at a combined $43 billion.
Sadly, these permanent funds amount to deferred government spending. Perhaps oil and gas will dry up as a source of revenues someday, but that shows no signs of happening anytime soon. Instead, we have a Gov. who shelves a small amount of tax reduction (while boosting spending by 14% in a single year) due to her supposed desire for fiscal responsibility.
The truth is that reducing New Mexico’s onerous tax burden NOW could generate economic growth NOW while diversifying our economy for the FUTURE so we won’t have to worry if/when oil and gas become less of a financial engine.