State Land Office Revenue Will Surpass $1 Billion In FY 2019
Record High Revenue Estimates Reflect 39% Increase from FY 2018.
SANTA FE, NM – The New Mexico State Land Office received more revenue from business activity in fiscal year 2019 than any year before. Conservative year-end estimates show revenue on track to surpass $1 billion. Given the nature of royalty payment collection, the exact royalty revenue amounts received will not be available until the Fall. Even with the most conservative projections for the last three months of the fiscal year, 2019 revenue is projected to be approximately $1,110,000,000. In fiscal year 2018, Land Office revenue reached $852 million.
“This is a record year for New Mexico. The State Land Office is open for business, and our business is making a huge impact. The Land Office is one of the most unique billion-dollar enterprises in the Southwest – every dollar that we raise goes directly back into our communities, helping build a better future for all New Mexicans,” Commissioner Garcia Richard said. “Not everyone knows that we financially support 22 public institutions, so when the Land Office succeeds, public schools, colleges, hospitals and other institutions succeed as well. We do business with a diverse array of companies – oil and gas, small and large businesses, wind and solar investors, farmers and ranchers, outdoor recreation outfits – and because of these strong partnerships and relationships with various industries, New Mexico households and taxpayers are getting a break.”
Every dollar earned by the Land Office is a dollar taxpayers do not have to pay to support public institutions. 2019 revenue will save the average taxpaying household an estimated $1,500 yearly.
The Land Office raises revenue from business lease payments, oil and gas earnings, rights-of-way easements, livestock grazing leases, permits, interest, fees and royalties. Revenue from these sources is deposited into one of two funds before being distributed to public schools, colleges, hospitals and other important state institutions.
Money brought in by land deals that do not permanently deplete a resource, such as renewable energy, livestock grazing, business leases, or planning and development, is deposited into the Land Maintenance Fund, which is distributed monthly to beneficiaries. Money from deals that deplete a resource, such as royalty paid for the extraction of oil, gas and minerals, is invested into the Land Grant Permanent Fund, and distributed to beneficiaries after investment by the State Investment Council.
Commissioner Garcia Richard added, “The State Land Office provides two different, but equally important, sources of income for the public institutions that we support. Not only do we distribute funds on a monthly basis, but we also are the sole contributor to the Land Grant Permanent Fund – the third largest public education trust in the nation – which has grown exponentially and provides vital resources to our public schools and other beneficiaries.”
Large increases from specific revenue sources lead to the record setting $1 billion for the most recent fiscal year, including:
- A 36-percent revenue increase in oil, gas and mineral royalty payments compared to fiscal year
- A roughly 30-percent revenue increase in business and commercial lease payments and bonus payments compared to fiscal year 2018
- An over 1300-percent revenue increase in solar energy lease payments compared to fiscal year 2018
- An over 400-percent revenue increase in wind energy lease payments
- A 61-percent revenue increase in right of way easements and right of way interest payments compared to fiscal year 2018
The State Land Office funds its own operational costs from the revenue it generates. In fiscal year 2019, operating costs were $17.4 million, or 1.56% of the projected total revenue.
Oil, gas and mineral production, ranching, farming and commercial development on State Trust Lands support public schools, seven universities, New Mexico Military Institute, New Mexico School for the Deaf, New Mexico School for the Blind and Visually Impaired, three hospitals, correctional facilities, water conservation projects, and public building construction and repair. In fiscal year 2019, the State Land Office collected $1 billion from lease payments, oil and gas lease sale earnings, rights-of-way, permits, interest, fees, and oil, gas and mineral royalties.