Permanent fund investments to surpass oil and gas revenue, securing New Mexico’s future by 2039
State Agency Press Release – From the New Mexico Department of Finance and Administration
Albuquerque, NM — The state’s Consensus Revenue Estimating Group (CREG) is projecting that permanent fund investments in New Mexico will surpass oil and gas as the state’s leading source of revenue by 2039.
CREG’s economic experts unveiled the long-term revenue outlook during a meeting of the Legislative Finance Committee on Tuesday.
“Thanks to our strategic investments in the state’s permanent funds and endowments, New Mexicans will continue to benefit from strong public programs such as early childhood education and the Opportunity Scholarship,” said Gov. Michelle Lujan Grisham. “We’re securing long-term prosperity and moving toward a more resilient and diversified revenue base that will pay dividends for generations to come.”
Record year-over-year revenue growth has enabled historic investments in New Mexico’s permanent funds, as well as education, health care, economic development, public safety and the environment, while also reducing taxes for New Mexicans.
“For years, we’ve talked about the need to diversify the state’s revenue stream to ensure that we can continue to deliver the level of services New Mexicans deserve. We’ve made incredible progress,” said Taxation and Revenue Sec. Stephanie Schardin Clarke
In 2023, the Legislature allocated $475 million to the Severance Tax Permanent Fund, with plans to reach $1 billion by 2033, contributing $92 million annually. In FY25, the permanent funds will distribute more than $2 billion to the general fund and other public entities and programs. By the decade’s end, the state will deposit an estimated $4.7 billion into this fund.
List of key state’s Investment Funds with balance:
- Land Grant Permanent Fund $31.897 billion
- Severance Tax Permanent Fund $9.836 billion
- Tax Stabilization Reserve Fund $2.191 billion
- Early Childhood Education and Care Fund $7.000 billion
Currently, New Mexico has $53.407 billion in total savings with all permanent funds. The state still has the opportunity to invest in our permanent funds in the 2025 Legislative Session to accelerate the growth of our return.
The CREG cautioned that while long-term forecasting is an important exercise for the state to undertake periodically, it should not be over-relied upon, given the inherent uncertainty in predicting the future.
The CREG includes economists from the Departments of Finance and Administration, Taxation and Revenue, Transportation and the Legislative Finance Committee.