Pub. 18 2021 Issue 4

Issue 4 • 2021 9 n EXECUTIVE VICE PRESIDENT’S MESSAGE continued on page 10 In a recent report from the New Mexico Tax Research Institute, it was reported that the New Mexico oil and natural gas industry provided $5.3 billion in state and local tax revenue for fiscal year 2021. This is the highest amount recorded in New Mexico history. As a reminder, the 2022 session, as with all 30-day sessions, is limited by the state constitution to bills dealing with state budget and revenue issues (appropriations and tax measures), legislation the governor asks the legislature to address, and bills vetoed by the governor in the previous legislative session. If legislation is introduced that was not in one of those categories, it is not considered “germane” and therefore not allowed to move through the process. However, this limitation does not apply to proposed constitutional amendments, which can be introduced in any legislative session, require only a majority vote in both chambers, and are not subject to approval or veto by the governor. Memorials and resolutions are also allowed in the short session. Oil and Gas Report In a recent report from the New Mexico Tax Research Institute, it was reported that the New Mexico oil and natural gas industry provided $5.3 billion in state and local tax revenue for fiscal year 2021. This is the highest amount recorded in New Mexico history. Revenue increased more than $500 million from fiscal year 2020 on production growth and improving market conditions, as New Mexico also became the second-largest oil producer in the United States. The $5.3 billion in 2021 revenue surpassed the previous industry record of $5.16 billion set in fiscal year 2019. The industry’s taxes and revenue support $2.96 billion in state general fund revenue, $358 million in local taxes, and $1.95 billion in other state taxes, royalties, and revenues. Revenue from federal mineral leasing remains the largest single source of income at $803 million, down slightly from $811 million in fiscal year 2020. Higher than average production coupled with improving market conditions were the primary drivers of revenue growth. Industry revenue accounts for 35% of the general fund, supporting all areas of state spending such as education, public safety, economic development, healthcare, among others. Public schools continue to be the largest beneficiary of oil and natural gas revenue, with $1.04 billion going to public education and $275 million going to New Mexico universities, colleges, and other institutions of higher education. New Mexico Banks’ Economic Impact Banks support New Mexico’s economy with consumer, business, and other loans and by providing more than 8,000 residents with a great place to work. The following statistics based on 2020 data point out how important banks are to New Mexico: ● Employment ■ 8,274 employees ■ $838.5 million in total annual compensation and benefits ■ 32 banks headquartered in New Mexico ● Lending ■ $5.1 billion in new home loans booked in 2020 ■ 20,855 new home loans in 2020 ■ $205,000 in median new loan amount in 2020 ■ $2.1 billion in Paycheck Protection Program (PPP) loans facilitated ■ 19,155 PPP loans ■ $30,508 median PPP loan ■ 257,700 jobs supported by PPP ● Customers ■ $39 billion in deposits ■ 1.8 million customers ■ 56 banks operating in branches ■ 448 branches and offices ● Community Support ■ $41 million in community donations ■ 49,100 volunteer hours Public Bank In October, several bankers, including Lonnie Talbert, Jay Jenkins, Jason Wyatt, Angel Reyes and Jed Fanning testified before the Legislative Finance Authority Oversight Committee against creating a public bank. As part of our testimony, we suggested that before the legislature is asked to consider the merits of a public bank, members should consider the issue as if the state were creating a de novo bank. Consequently, there should be a requirement that the organizers follow the FDIC and NM Financial Institution requirements for organizing de novo banks. Specifically, the requirements for de novo banks stipulate: ● Submit an application to FDIC and NM Financial Institutions Division (FID) to include: ▪ A mission statement ▪ A business plan with three years of financial projections ▪ Policies for loans, investments, and other operations of a de novo bank