More oil-related revenue flowed into state coffers in the wake of the Iran conflict, with New Mexico estimating a $500 million boost and Texas reporting record-high collections from its oil production tax in June.
The war, which the Trump administration commenced Feb. 28,
The Permian Basin, which spans 55 counties in west Texas and southeast New Mexico, is the nation's largest source of crude oil and those states rank number one and two respectively for production.
Triple-A-rated Texas' oil production tax generated $736 million in June, marking the largest monthly collection on record, the
That followed April's 30% jump to $567 million, and May's 64% rise to $677 million. January, February, and March collections were down 18%, 21%, and 11% respectively.
In New Mexico, revenue from severance taxes and federal mineral leases is up an estimated $500 million in fiscal 2026, which ended on Tuesday, benefitting state trust funds for early childhood education and care, Medicaid, and behavioral health, as well as the severance tax permanent fund, according to Brendon Gray, an economist at the state's Legislative Finance Committee.
He told
"We've seen just a ton of money coming through here, so we're sifting through what exactly this means," he said. "We're disentangling the level that this is indirect revenues from the oil spike or other factors that might be at play, maybe some tax changes, maybe some extension payments, timing has changed. It's very complicated."
Gray also said New Mexico's budget reserves are "fairly robust," equaling an estimated 31.6% in fiscal 2026 and 26.5% in fiscal 2027 of recurring general fund appropriations.
"We are in the best position to handle any type of downturn that we might face, maybe that we've ever been in," he said.
In January, Moody's Ratings
