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Hobbs leaders urge Legislature to fix HB 6 and approve All Cities and Counties fund
Summary
Local officials in Hobbs told the Legislative Finance Committee that destination-based sourcing from House Bill 6 shifted oil-gas gross receipts away from producing communities and asked lawmakers to back an "All Cities and Counties" distribution or formula tweaks to return more funding to counties bearing service burdens.
Local leaders from Hobbs and Lee County pressed the Legislative Finance Committee to address what they called unintended consequences from House Bill 6, which moved to destination-based sourcing for certain gross-receipts taxes.
"We've seen a 116.9% increase in revenues for mining, primarily oilfield services, while the city of Hobbs received a 68.64% decrease as a result of the change," said a community presenter during the field hearing. City and county officials argued that the state's tax shift sends revenue to where corporate headquarters or purchasers are located, not where services and infrastructure are consumed.
The mayor's office and the Economic Development Corporation of Lee County described local impacts in public safety and infrastructure. Manny Gomez, Hobbs city manager, noted the city is facing greater service demand from a recent influx of workers and new business registrations and asked the committee to consider the proposed All Cities and Counties Fund to redistribute some revenue more equitably.
"We support the idea of sharing the wealth," Gomez said, while urging lawmakers to "maybe tweak the formula" so more money flows to jurisdictions that shoulder road, law enforcement and fire service burdens.
Representative Elaine Cinecortez and others, who said they will carry corrective legislation, framed the proposal as statewide relief: the bill as presented would not only aid Hobbs but could provide support across all 33 counties. Representative Catherine Brown recalled prior attempts at relief that were vetoed by the governor and said the new fund was the "most logical" path forward.
Committee members asked technical questions about how a redistribution formula might work and whether population caps or per-capita limits could temper outsized payments to populous counties. Local officials offered an approach that would cap the amount any single county receives and redistribute excess to smaller counties.
No formal votes or motions were taken during the discussion; members and presenters agreed to follow up with additional fiscal detail and potential legislative language before the next session.
The committee will request the presenters' slide material and additional fiscal-impact breakdowns to inform any bills drafted during the upcoming session.
