Commentary: A few days ago Congressman Steve Pearce was interviewed on KRWG radio, asking about the budget issues in New Mexico. He said that because of over-regulation and Corporate tax policy the oil and gas industry in New Mexico is not able to contribute their normal 40% of State tax revenue. There are so many distortions in that statement, I hardly know where to start.
First, over ½ the State budget in 2014 came from sales tax and personal income tax, while less than 17% was paid into State coffers from oil and gas industries. The main reason oil and gas revenue decreased recently is because prices for those products dropped by more than 50% over the last few years and many wells were shut down—not because of regulations and tax policy.
Being dependent on an extractive industry for stable state revenue is very foolish. What we need is a more diverse economy that encourages a variety of energy industries like solar and wind energy, as well as Investment in broadband internet and other needed infrastructure, more value-added products from our agriculture and forestry industries, finding ways to commercialize the ideas coming out of our Federal labs and Universities and finally a well-educated work force in both technical and academic skills. As a colleague said to me recently—“you can’t cut an economy into prosperity”. You need both public and private investment.