Keep pulling the thread on New Mexico.
While oil-rich states cut top marginal income tax rates during the 2003-2014 revenue boom, these tax cuts were not reversed when revenues declined after 2015.
Economic modeling for Wyoming assumes a 20% decline in state revenues from fossil fuels by the year 2040.
Revenue from minerals and fossil fuels, which constituted over 60% of Wyoming's state budget in the mid-2000s, has since fallen to between 30% and 40%.
TerraPower has broken ground and started construction on a new Natrium nuclear power plant in Kemmerer, Wyoming.
The primary constraint on economic growth in New Mexico's urban hubs, such as Albuquerque, is the lack of responsiveness in their housing markets.
San Juan County, New Mexico, experienced severe economic shocks from the closure of the San Juan Generating Station and a decline in oil and gas activity.
The economies of Wyoming and New Mexico are heavily reliant on the oil, natural gas, and coal industries.
The US fracking boom, which began around 2003 and peaked in 2014, was followed by a collapse in oil prices and a decline in fossil fuel revenue for states from 2015 to 2020.
Research indicates that during the 2003-2014 oil boom, per-person government spending in oil-rich US states was approximately 7.5% higher than it would have been otherwise.
Survey data from oil-rich states shows public support for financing budget shortfalls through progressive tax increases, such as higher income taxes on top earners and property taxes on expensive properties.
In states without an income tax like Alaska, Wyoming, and Texas, the most favored policy response to budget shortfalls is cutting higher education funding rather than implementing new taxes.
A REMI model simulation for Wyoming found that introducing a personal income tax or increasing the sales tax would be the most effective measures to offset declining fossil fuel revenue.