New Mexico’s 2026 legislative session marks the last chance for Gov. Michelle Lujan Grisham’s policy initiatives to become law while she’s still in office: Her term-limited tenure winds up at the end of the year. Meanwhile, the session begins, as ever, with concerns over revenue from the state’s biggest private-sector funder, the oil and gas industry.
Booming oil production in New Mexico’s portion of the Permian Basin has driven state budgets to record highs in recent years. But in 2025, the state’s oil production rose only slightly while crude oil prices dropped dramatically — down roughly 25% since President Donald Trump returned to office last January.
In its December revenue report, state economists with the Legislative Finance Committee said, The state’s “current price softness now outweighs production growth as the dominant downward influence on revenue projections.” Put plainly, slower production increases coupled with much lower oil prices will lead to a shallower growth curve in future revenues for the state.
