The oil and natural gas industry contributed more than $2.2 billion to New Mexico’s general fund in fiscal year 2018, according to a new report released today by the New Mexico Oil and Gas Association (NMOGA). More than half of the industry generated revenue supported K-12 public schools and higher education institutions across our state.
The “Fueling New Mexico: The Oil & Natural Gas Industry’s Impact on our Schools” report drew from facts and figures produced by the New Mexico Tax Research Institute, the state’s Public Education Department, and the U.S. Census Bureau, to get a complete picture of the many ways oil and natural gas development to fund our state government – which includes gross receipts taxes, severance taxes, state royalties, and federal energy revenues.
These and other revenue sources provided by the industry have driven our state income to a record high and a $1.1 billion budget surplus. NMOGA Executive Director Ryan Flynn wrote in the report:
Nowhere is that impact more evident than our public schools where the oil and natural gas industry contributed more than $822.3 million to help our 330,000 school children have the best education possible. An additional $240.5 million supported colleges and universities including the University of New Mexico and New Mexico State University.
Compared to the previous fiscal year, the oil and gas industry generated $128 million more for education in FY 2018. That additional revenue would be enough to hire 2,300 new teachers.
Everyone benefits from each of the revenue streams that is generated by the oil and natural gas industry. Even counties with no oil or gas production in the state will receive funding from production activity taking place throughout New Mexico.
For example, the oil and gas industry supported $97.6 million of school funding dollars in Doña Ana County for its 39,000 K-12 students – even though there is no production in the county. To put that amount into perspective, that is enough for the county schools to provide free lunch for the entire year, buy a set of four text books for every student, and pay the salaries of 1,500 teachers.
New Mexico State University and Doña Ana Community College benefited directly from the $56.9 million in higher education funding supported by the oil and natural gas industry – enough to award a $2,472 scholarship to every undergraduate, graduate, and community college student at both institutions.
The school systems and higher education institutions in Bernalillo, Sandoval and Santa Fe received a total of $461.1 supported by energy development million in fiscal year 2018. The oil and gas industry even supported more than $1 million for schools in Catron County, which have only 268 students.
A large portion of the education funding described in the report is derived from state trust land, on which about 32% of oil and 20% of natural gas production occurs in New Mexico. As NM4EP previously reported:
In fiscal year 2018, oil and gas development accounted for 93% of the $852 million in revenue delivered to the state trust lands funds. Public schools received $698.4 million from these funds, an increase of $85 million from the previous year.
This doesn’t include some state revenue sources that were included in the NMOGA report, such as personal incomes taxes from the jobs created. As oil and gas development continues in southeast New Mexico, state trust lands will remain a critical driver of revenue and economic prosperity.
A stronger education system in New Mexico is critical to sustaining this prosperity, and increased energy development has been a major contributor to this mission. Having an educated and skilled workforce will continue to attract new industries to our great state and enable existing businesses to expand.
“The future is bright for New Mexico, and this report highlights how the oil and gas industry is doing our part to make our state stronger and better for future generations,” the NMOGA report concludes. “New Mexico has vast potential, and working together there is no limit to what we can accomplish as a state.”