Oil Price Inflation, Investment Earnings Fuel New Mexico Budget Windfall
New Mexico lawmakers are set to receive an estimated $924.2 million in 'new money' for fiscal year 2028, thanks largely to a war-inflated oil price and investment earnings on the state's permanent funds.
The August 2026 Consensus Revenue Estimate, presented to the Legislative Finance Committee, projects recurring general fund revenues of $14.53 billion in fiscal year 2027 and $14.76 billion in fiscal year 2028.
The single biggest force behind the upward revision is the price of oil, which averaged $72 per barrel in FY26, well above what forecasters assumed before the conflict with Iran that erupted in late February.
Every $1 change in the annual average price of New Mexico oil swings state revenues by roughly $56.5 million, and investment income is also growing rapidly, driven by years of record oil and gas contributions to the land grant permanent fund.