The recent session of the New Mexico legislature has brought forward an emerging concern about the state's approach to its economic reliance on the oil and gas industry, as pointed out by Missi Currier. The ongoing strategy of increasing taxes on this industry, yet depending on it to support essential programs, is argued to be inconsistent and unsustainable.
The oil and gas sector has historically provided significant financial support to New Mexico, contributing to nearly half of the state budget. It plays a key role in funding important initiatives such as "bills like SB48 and SB49, which aim to improve the quality of life for all New Mexicans through $360 million in investment throughout the state, funded by oil and gas revenues." However, the suggested Oil and Gas Equalization Tax could potentially harm the industry's ability to sustain these contributions.
Currier warns that the increased tax burden on this sector may lead to "reduced investment, job losses, and stifled economic growth." Such outcomes would compromise its capacity to continue financing vital programs, thereby threatening the very initiatives legislators aim to preserve with this taxation proposal.
Rather than repeatedly targeting the oil and gas industry for additional taxes, Currier suggests that New Mexico should pivot towards economic diversification. The state's Economic Development Department's 2025 strategic plan highlights sectors such as "renewable energy, technology, and tourism" as potential areas for growth. By investing in these industries, a more varied economy could emerge, reducing reliance on a singular sector and ensuring a steadier revenue flow for state programs.
Currier emphasizes, "Diversification is not just a buzzword; it is a necessity for the long-term prosperity of our state." Developing new industries could foster job creation, entice new business, and sustain funding for essential programs, thus contributing to a more sustainable future for all residents.
It is pointed out that "the oil and gas industry is not holding New Mexico back. New Mexico’s business climate is what continues to hurt our state’s potential to grow." Acknowledging the significant role of the oil and gas industry, Currier calls for legislative actions towards fostering broader economic growth as proposed in the state's strategic plan.
Conclusively, there's a call for New Mexico legislators to understand the critical role of the oil and gas industry in the state's budget and the risks of taxing it further. Instead, focusing on diversifying the economy could lead to a resilient infrastructure capable of benefiting the broader population.
