According to state economists, New Mexico’s recurring revenue estimatescontinue to soar, outpacing most of the rest of the nation.
During the last report back in December, the estimate was 12.5% revenue growth which at the time was the largest estimated revenue growth in the country. It turns out the growth was 20%. That means the state will have $3.5 billion in new money.
Legislative Finance Committee Chief Economist Ismael Torres told the Revenue Stabilization and Tax Policy Committee most of that moneyis coming through oil and gas production’s rents and royalties.
“They are making up two-thirds of the revenue growth in FY24, $827 million coming from those two sources. It’s really important to know that after this year. We’re going to go back to more historical levels of revenue growth, about three to four-percent, ” he said. “It’s going to be an interesting challenge going into the session on how to use this sort of lottery jackpot winnings and smooth that out over several years so maybe you don’t have such up and down revenue spending.”
According to the report, while experts warned of a recession, the U.S. economy showed resilience, with real gross domestic product, growing 2.4 percent year-over-year in 2023. That was slowing from the 4 percent growth seen in 2022 but above expectations of a more abrupt drop.
Other strong economic indicators, such as job growth, low unemployment, and strong consumer spending, suggest the Federal Reserve, despite implementing sharp increases in interest rates to curb inflation, may be on track to achieve a “soft landing,” where inflation cools without the economy tipping into recession.