Note: This Associated Press story originally appeared in U.S. News & World Report.
SANTA FE, N.M. (AP) — New Mexico state economists on Monday affirmed forecasts for a major financial windfall to state government linked to a booming oil sector despite recent fluctuations in energy prices, as the governor’s office passes from Republican to Democratic control.
Democratic Gov.-elect Michelle Lujan Grisham has set as top priorities an increase in resources for public education and universal access to preschool, as she prepares to succeed termed-out Republican Gov. Susana Martinez on Jan. 1.
The state is expected to finish this fiscal year with $1.4 billion in excess revenue and the forecast calls for revenues to outpace spending obligations again next fiscal year, resulting in a $1.1 billion surplus, according to economists at three state agencies and the Legislature.
Financial reserves are expected to swell to $2.5 billion by June 2019, equal to 40 percent of annual general fund spending.
Budget analysts for the Legislature trace about 80 percent of growth in state income during the current fiscal year directly to the oil and gas industry through severance taxes, rent, royalties and secondary taxes on sales and business-to-business transactions.
“You can see oil production has just been skyrocketing every month,” said Jon Clark, economist to the Legislative Finance Committee.
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