You can tell liberal elitism has taken over when the biggest newspaper in New Mexico runs a banner article highlighting how record-high gas prices are good for the state.
Coffers, that is, not residents.
But dawdling old Biden gets a pass with caveats like, “Yeah, you’re paying thousands more for literally everything you need to live, but at least the state will take more of your tax money and give it away to people who didn’t earn it.”
Dan Boyd reports that New Mexico could see an extra $600 million in revenue because “each dollar increase in the average price of oil means an additional $30 million in revenue for New Mexico.” This claim isn’t cited, but a March 2021 “New Mexico Voices” claims that an additional dollar in the price per barrel of oil “translates into an additional $9.5 million for the general fund.”
Whether it’s $600 million or $200 million, the lawmakers who increased the state budget 14% in a single year are surely licking their chops at the prospect of wasting even more money.
That was before Russia invaded Ukraine, which spurred the U.S. to cut itself off from another 11% of oil imports from Russia, pushing prices over $4.30 per gallon this week.
Offsetting Oil Revenue
When gas prices surge, drivers don’t only drive less. They cancel vacations, eat out less, shop less, carpool, and consolidate trips to avoid unnecessary mileage.
According to an AAA Gas Prices survey released Thursday, 58% of Americans planning to vacation this summer are considering changing their plans because of gas prices. A full 80% said they would drive less, 53% of adults over 35 and 43% between 18 and 34 will cut back on dinner and shopping.
All of that comes at a price. Not only will consumer choices offset oil and gas revenue for the state, but workers and businesses will be hurt by consumer choices too. A 60% reduction in vacations, half as many dinners out — all of these decisions trickle down to the employees who get their hours cut and themselves have less money to put back into the economy.
A Net Gain?
It’s anybody’s guess what total economic effect inflation and gas prices will have in coming months. “Experts” seem to have no better understanding of basic economic indicators than they did of COVID.
Some Republicans — including gubernatorial candidate Mark Ronchetti — are pushing for a temporary reprieve of the state’s 17-cent gas tax. While any tax cut is better than none, gas prices in New Mexico are up $1.35 per gallon since March 2021. As the fifth largest state by land area and third in most miles driven per capita nationally, 17 cents isn’t going to make a dent in changing consumer choices.
Cutting New Mexicans a check would, though. Combining the 12% savings from the gas tax suspension and another 14% in stimulus (the amount legislators increased state spending this year) would get residents at least halfway to the prices they were spending when Biden took office.