DALLAS — New Mexico lawmakers may have about $100 million less than previously expected for next year's budget due to falling oil prices, according to recent estimates.
State economists will release their latest revenue estimate in December.
Lower revenues could prevent efforts to cut taxes.
"We think the budget is simply not going to be big enough to accomplish major tax reform," Finance and Administration Secretary Tom Clifford told members of a key legislative panel, according to the Albuquerque Journal.
New Mexico is one of several states that rely heavily on oil and gas revenue. The price of benchmark West Texas Intermediate crude has fallen about 30% from its peak in June.
About 19% of New Mexico's general fund revenue comes directly from oil and gas taxes and royalties. Until the recent decline, oil prices have held fairly steady at $100 per barrel or higher for the past year.
With a budget of $6.2 billion, New Mexico was expecting about $285 million of new revenue before the price of oil began falling. Now, that number has fallen by about $100 million, officials said.
New Mexico's cash reserve levels were projected in August to end the current fiscal year at $697 million, representing about 11.3% of the current budget.
Clifford told the legislative panel that the state is well prepared to absorb the drop in oil prices.
"The state is still on very stable financial footing," he said.
New Mexico carries general obligation bond ratings of Aaa from Moody's Investors Service and AA from Standard & Poor's. Outlooks are stable.
An Oct. 27 report from Moody's included New Mexico as one of five states that are vulnerable to falling oil prices. Others were Alaska, North Dakota, Texas and Oklahoma.
