Size, scope of planned tax rebates unresolved - Albuquerque Journal

Size, scope of planned tax rebates unresolved

Copyright © 2022 Albuquerque Journal

SANTA FE – Legislators say they are eyeing rebate checks in the range of $250 to $400 for each tax filer in New Mexico as they prepare economic relief measures ahead of next month’s special session.

But the precise size, scope and timing of the rebates, including whether to impose an income limit on those eligible, remain under discussion.

The new range is an increase over what lawmakers were analyzing earlier this month: $110 to $160 per taxpayer.

“As we’ve been digging,” Democratic Rep. Christine Chandler of Los Alamos said, “we’re thinking we can probably afford more.”

The debate comes as lawmakers prepare for an April 5 return to the Capitol for a special session called by Gov. Michelle Lujan Grisham.

The agenda is expected to include just two items – economic relief to blunt the increased price of gas and a $50 million supplemental spending package.

Tax rebates, lawmakers say, have emerged as the likely strategy to help New Mexicans afford gas prices that now exceed $4 a gallon. The average price of regular-grade gasoline in New Mexico is up to $4.140, according to AAA, a 19% jump over a month ago and a 44% increase over a year ago.

As the nation’s No. 2 oil producer, New Mexico is enjoying a revenue boom, with reserves projected at roughly 29% of annual spending, or around $2.5 billion. How to handle the extra money flowing into state accounts has been at the center of debate at the Roundhouse off and on for months.

The governor and lawmakers approved an $8.5 billion budget package earlier this year, a record high.

Senate Finance Committee Chairman George Muñoz, D-Gallup, said Wednesday that he is preparing a proposal for rebates of $300 per individual, or $600 for a couple filing jointly. He estimated it would cost the state about $455 million.

The checks, Muñoz said, should go out as soon as the legislation is signed into law.

“Now’s the time,” he said. “People are planning summer trips.”

An earlier round of tax rebates – approved earlier this year after a push by Republican Sen. William Sharer of Farmington – is set to be distributed in July, the beginning of the fiscal year. The legislation calls for a $250 rebate for adults who make less than $75,000 annually, or $500 for married couples filing jointly who make less than $150,000.

Sharer said he pushed for more generous checks earlier this year and a much higher income limit. He views the checks as reimbursement for taxpayers having overpaid the government, as reflected by the jump in new revenue.

“I’m glad you came around,” he said of Democratic colleagues, “but why didn’t you do it the first time?”

Chandler, chairwoman of the House Taxation and Revenue Committee, said she favors sending checks to every taxpayer rather than imposing an income requirement on the next round of checks.

But she cautioned that the contents of the proposal are still a matter of debate.

“The focus of the rebates is to soften the blow of high gas prices and some other inflationary things going on right now,” Chandler said. “That pretty much applies to everyone across the board.”

Talks have focused on checks of $250 to $400 per tax filer, or double that for couples filing jointly, she said.

Lujan Grisham, a Democrat up for reelection this year, reached agreement Friday with legislators on plans to call a special session next month.

Besides economic relief, lawmakers will also take up a revised version of the $50 million supplemental spending legislation, Senate Bill 48, that she vetoed last month.

Her administration said the economic relief measures are still under development.

“The governor is committed to delivering economic relief to New Mexicans while maintaining fiscal responsibility,” Lujan Grisham spokeswoman Nora Meyers Sackett said, and “our conversations with legislative leadership and state finance experts on the details of what that relief will look like are ongoing.”

High gas prices and strong government revenue have triggered debates in state capitals across the country. In California, Gov. Gavin Newsom has proposed debit cards of $400 or $800 to help vehicle owners with gas prices. Alaska, by contrast, issues dividends each year to full-time residents based on the investment earnings on mineral royalties – resulting in dividends of $1,114 per person last year.

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