Originally published at nationalreview.com on March 5, 2025.
In his recent visit to the Land of Enchantment, Energy Secretary Chris Wright underscored New Mexico’s national significance in energy production, highlighting its vital role in meeting growing U.S. energy demands through oil, solar, and emerging nuclear and geothermal industries. Simultaneously, the state is enjoying more than $800 million in new tax revenue from oil and natural gas extracted from the Permian Basin in the southeast corner of the state. The oil and gas tax revenue has grown over 50 percent in the last year, is worth $2.1 billion, and represents over 20 percent of the state’s annual budget.
This government-controlled wealth has prompted an urgent and consequential question: How do we transform today’s abundance into lasting prosperity? The Southwest Public Policy Institute believes the answer lies in empowering New Mexicans directly by establishing a permanent fund dividend (NMPFD). Modeled after Alaska’s successful program, this proposal offers a path toward economic freedom, poverty alleviation, and long-term stability.
In 2025, the Alaska Permanent Fund Dividend (supplemented by a one-time bonus) provided residents with $1,702 per person. The Alaska program annually distributes a share of the state’s oil and gas revenues to eligible residents, ensuring they directly benefit from Alaska’s resource wealth. Residents must apply between January 1 and March 31, meet residency requirements, and receive payments in October, with amounts varying based on fund performance. This program has become a cornerstone of financial security. A similar approach in New Mexico could provide families with financial relief and economic empowerment. Not only that, but it would also give New Mexicans a greater sense of ownership of the hydrocarbon wealth. Of course, given how much oil and gas revenues contribute to the state’s budget, its residents already benefit from this, but a new dividend program would convert an abstract line item on the state budget into something very tangible: a literal check.
New Mexico has consistently ranked as one of the poorest states in the country and, in 2022, had the second-highest poverty rate in the nation at 17.6 percent. Direct payments would offer much-needed financial relief to New Mexicans, especially those in low-income households. With many families struggling to afford basic expenses, even modest payments of $1,000 to $2,000 annually could provide a critical safety net. These funds could help families cover medical bills, invest in education, or simply afford groceries. This is not charity; it is an equitable return of the wealth generated by New Mexico’s natural resources.
Beyond individual relief, dividends drive broader economic growth. When residents receive their payments, they spend locally, boosting retail, services, and housing markets. This influx of cash creates a ripple effect, generating jobs and opportunities in underserved areas. The impact could be significant, considering that over half of New Mexicans live in rural areas. Families could also use dividends to increase their savings, another boost to economic stability.
Critics often point to the volatility of oil and gas revenues, but the proposal is built on fiscal responsibility. By setting aside a portion of surplus revenues in a financial reserve, the NMPFD could ensure consistent payouts even during lean years. Looking again to Alaska’s Permanent Fund as the model, the reserve would be structured to sustain dividend payments for multiple decades, aiming for long-term solvency through prudent investment and withdrawal policies. This approach safeguards against economic downturns and ensures the program’s sustainability.
Alaska’s model provides a domestic example of how these funds can directly benefit residents. By adopting a similar approach, New Mexico could address some of the immediate economic challenges facing its people and position itself as a leader in innovative fiscal policy within the United States. The NMPFD could become a national example of how states can responsibly manage resource wealth while prioritizing the well-being of their citizens.
In 2024, New Mexico received an unprecedented $2.1 billion in direct tax revenues arising out of oil and gas production within its borders, a staggering amount for a state with only 2.1 million inhabitants. The result was that the state’s fiscal year 2025 budget included $10.5 billion in recurring general fund appropriations — a 9.9 percent increase over the previous year. While this budget includes significant education, health care, and public safety spending, there’s an understandable fear about government inefficiency and wasteful spending.
The current allocation of surplus revenues in New Mexico is wasteful. Too often, funds are directed toward government programs that fail to deliver results. Public education exemplifies this inefficiency, with Albuquerque Public Schools doubling per-student spending over the past decade while achieving dismal academic outcomes. Similarly, proposals for government-controlled funds, like Think New Mexico’s $2 billion health care fund, often grow disconnected from residents’ immediate needs. Instead of expanding bureaucracy, the NMPFD places funds in the hands of New Mexicans.
Unlike state mandates such as the proposed Paid Family and Medical Leave Act, which proposes new payroll taxes and a state-controlled paid leave program, the NMPFD empowers individuals without imposing additional burdens on employers or workers. Direct payments provide flexibility for families to address their unique needs, whether for medical leave, education, or other priorities, without the inefficiencies of government bureaucracy.
New Mexico’s current oil and gas revenue boom presents a rare opportunity to enact transformative change. Without a plan, this wealth could be squandered on short-term fixes rather than creating lasting solutions. A permanent fund dividend would provide immediate financial relief to residents, stimulate local economies, and build a financial reserve for future generations.
At its core, the NMPFD is about trust. It’s about trusting New Mexicans to make the best decisions for their families and futures. This is not an “either/or” scenario. With proper fiscal management, the state can fund critical initiatives while returning prosperity to the people who make New Mexico vibrant and unique.
This is a pivotal moment for New Mexico. A permanent fund dividend isn’t just good policy — it’s the right thing to do for the people of our state and could become a model for the country.
Originally published at nationalreview.com on March 5, 2025.