A spate of good economic news has arrived in New Mexico but it's largely due to bad news from around the globe. 

An ABQ defense firm says they are expanding their workforce to manufacture more drones which have become a weapon of choice in the Ukraine and Middle East wars.

DC is looking to Los Alamos Labs to build even more plutonium pits for nuclear weapons which would send the Labs' already robust budget even higher. 

As always the most important development for the state is the price of oil. This time the price has shot up from the low 60's to the low 70's per barrel because of the Iran oil shock. How long it will stay there, of course, is unknowable but the big price jump makes it timely to look at the impact that war and the oil price has on the state. 

A one-dollar change in the price of a barrel of West Texas Intermediate (WTI) crude oil has outsized impact on the state budget. New Mexico is now the second-largest oil producer in the U.S.--thanks to the ongoing boom in the Permian Basin in SE NM. 

For every $1.00 increase in the annual average price per barrel of oil, the state's General Fund gains approximately $30 million to $35 million. When you include the tax and royalty money that goes into the Early Childhood Trust Fund and other savings—the total impact can top $45 million per dollar change. 

While a $1.00 increase is a boon, the state is also vulnerable to the downside. If oil drops $10 below the forecast, the state suddenly faces a $300 million to $350 million hole.

State law now requires that "excess" oil and gas revenue (anything above the five-year average) be diverted into permanent funds rather than spent on daily operations. This acts as a shock absorber so the state doesn't have to cut essential services if the price crashes.

The oil boom has been a gift for New Mexico politicos who have legislated with barely any financial pressure throughout the two terms of MLG. Will that continue for the next Governor and legislature? That's out state's most expensive question.

ATTENTION CANDIDATES

We get this from Bernalillo County of special interest to those running for election this year:

Candidate Filing Day for County Commissioner (Districts 1 & 5) County Assessor, County Sheriff and County Probate Judge for the June 2 primary is Tuesday, March 10, from 9 a.m. to 5 p.m. at county commission chambers downtown. Candidates must also complete and submit a Bernalillo County Statement of Certain Financial Interests. Candidates should review the Secretary of State's Primary Candidate Guide and required forms prior to filing

WHITMAN WATCH

Whitman

Billionaire Meg Whitman, settling into ABQ as her new residence, continues to make the rounds. After penning a newspaper op-ed about the state's economic future, she has now conducted a half-hour newspaper video interview posted on social media. The discussion did not touch upon any public service ambitions Whitman may have here. 

Reliable sources have told us that Whitman could have her eye on the soon-to-be vacant presidency of the University of New Mexico. 

She is a former CEO of Hewlett Packard, a Republican turned Democrat who served as ambassador to Kenya under President Biden and once ran for governor of California. Her husband, now leads the UNM Neurosurgery department. 

This the Home of New Mexico Politics.