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SANTA FE – An influential legislator in the House says she plans to propose rebates of $350 per tax filer – or $700 for married couples filing jointly – in next month’s special session as policymakers evaluate how to help New Mexicans hit by high gas prices.
In an interview, state Rep. Christine Chandler, a Los Alamos Democrat and chairwoman of the House Taxation and Revenue Committee, said the proposal would be intended for all tax filers, without an income limit on who qualifies.
She envisions dividing the rebate money into two rounds – with an initial set of checks this spring and another in the fall. In other words, a person might get $250 in May and then another $100 in September.
“There’s always a balancing act when you’re looking at the budget,” Chandler said Friday. “What can we afford? I think these are significant enough so that people will really appreciate the extra money they’re getting back.”
The proposal would cost roughly $530 million but still allow the state to maintain reserves of close to 30% of annual spending, she said.
Chandler’s approach, of course, may represent just one option lawmakers take up. Her proposal could be amended or set aside entirely.
But the House committee she leads is often a starting point for tax legislation.
Sen. George Muñoz, a Gallup Democrat and chairman of the Senate Finance Committee, said earlier this week that he is preparing legislation that would propose $300 checks for individuals and twice that for couples – a plan with an estimated cost of $455 million.
In an interview, Sen. Steven Neville, R-Aztec, said the state has enough money to afford substantial rebate checks this year.
But lawmakers, he said, shouldn’t lose sight of the need for broader changes to the tax code that would provide ongoing relief.
“It’s a real disincentive for business,” Neville said of New Mexico’s tax system.
How to reshape New Mexico’s gross receipts tax – applied to the sale of goods and services – is an ongoing debate at the Capitol. The tax reaches 9% in some communities.
The Legislature this year approved a proposal by Democratic Gov. Michelle Lujan Grisham to reduce the state government’s portion of the rate by 0.25 percentage points. But supporters of overhauling the tax code say more substantial changes are needed.
The immediate focus, however, is on rebate checks.
As the nation’s No. 2 oil producer, New Mexico is enjoying a revenue boom at the same time drivers are seeing higher prices at the pump. The cost of regular-grade gasoline in the state has shot up from an average of $2.869 a gallon a year ago to $4.146 now, according to AAA, a 45% increase.
Lujan Grisham is calling lawmakers to the Capitol for a special session April 5 to take up economic relief and revisions to a supplemental spending bill.
The rebate checks up for debate next month would be in addition to tax relief authorized earlier this year. New Mexico already plans to send out $250 rebate checks in July to individuals who make less than $75,000 per year, or $500 for couples making under $150,000.
Discussion of another round of rebates surfaced as gas prices continued to climb over the last month, driven partly by Russia’s invasion of Ukraine.
Chandler said rebates are especially important for rural residents who cannot avoid driving long distances.
“We’re trying to find a way to soften the impact,” she said.
Democrats hold majorities in both chambers of the state Legislature. Lujan Grisham, up for reelection this year, is also a Democrat.
Others states also are evaluating how to offset escalating gas prices. California Gov. Gavin Newsom has suggested $400 or $800 debit cards for vehicle owners, for example, and Maine Gov. Janet Mills has proposed $850 relief checks for individuals.