Special session ends with approval of new round of tax rebates - Albuquerque Journal

Special session ends with approval of new round of tax rebates

From left, Reps. Christine Chandler, D-Los Alamos, Daymon Ely, D-Corrales, and Ambrose Castellano, D-Las Vegas, talk on the House floor before the start of a special session at the Roundhouse. The special session lasted just 12 hours and was focused on financial relief for New Mexicans dealing with high gas prices. (Eddie Moore/Albuquerque Journal)

Copyright © 2022 Albuquerque Journal

SANTA FE – A $698 million proposal to issue a hefty new round of tax rebates and cash payments to New Mexico residents won bipartisan approval Tuesday, as lawmakers took just 12 hours to start and finish a special session.

An estimated 1.4 million New Mexicans – or about two-thirds of the state’s population – would qualify or automatically receive financial relief under the proposal, which Gov. Michelle Lujan Grisham is expected to sign into law.

Rep. Christine Chandler, a Los Alamos Democrat and co-sponsor of the bill, House Bill 2, said the legislation would help New Mexicans facing high gasoline costs and other price increases.

“It’s intended to lift the burden on so many households in New Mexico,” she said Tuesday as she addressed her colleagues.

Specifically, the legislation calls for the state to tap into its oil-fueled budget surplus to issue $500 in tax rebates to individual filers and $1,000 to married couples filing jointly.

Half the cash would go out by the end of June, and the remainder would be sent in August. Tax filers would get the money automatically.

The proposal also creates a $20 million pool that would provide similar payments to residents who don’t file taxes, such as low-income seniors. Applicants would get the cash on a first-come, first-served basis until the funding is exhausted.

It passed the House on a 51-13 vote shortly after 6 p.m., picking up bipartisan support after two hours of debate. The bill then won Senate approval on a 35-1 vote several hours later, allowing lawmakers to complete the session in just a day.

Opponents – all Republican lawmakers – questioned the legality of parts of the proposal, the timing of the assistance and whether one-time rebates and relief payments are an effective, sustainable way to address inflation.

“This rebate will not fix New Mexico’s broken tax system,” Republican Rep. Jack Chatfield of Mosquero said.

The overwhelming support in both the House and Senate would be enough to trigger an emergency clause allowing the measure to go into effect immediately upon the signature of Lujan Grisham.

The emergency language – which requires a two-thirds vote in each chamber – was crucial to ensure the first checks go out in May or June rather than in the standard 90 days.

Democrats, who hold a large majority in both legislative chambers, uniformly supported the proposal, while Republicans were split, especially in the House. Some of the opposition touched on allowing immigrants, regardless of legal status, to qualify for the relief.

House Minority Whip Rod Montoya, R-Farmington, said lawmakers “need to have the debate openly” on who could benefit from the assistance.

But House Majority Leader Javier Martínez, D-Albuquerque, said immigrants – regardless of legal status – pay taxes and deserve to qualify for economic relief the same as anyone else.

“We can disagree on policy all day long,” he said. “We should never revert to dehumanizing other people.”

Timing questioned

Lawmakers also debated the timing of the payments in an election year in which all 70 House seats and statewide offices – including the governor – are on the ballot. The primary election is June 7, and the general election is Nov. 8.

Rep. Randal Crowder, R-Clovis, noted that the second rebate payment would come amid the general election campaign.

“If the public is hurting, front the money,” he said. “It appears this is somewhat a political decision rather than a fiscal decision to split it into two buckets of money.”

Chandler and other Democrats disputed that political motivations shaped the payment schedule.

Instead, she said, the goal is to spread the payments over two fiscal years to avoid taking the hit all at once. The fiscal year begins July 1.

“We felt it was more fiscally responsible to split them up between two fiscal years,” Chandler said.

The rebates are expected to cost about $677 million, spread equally between this and next year’s budgets. The bill also sets aside $20 million for payments to non-filers and $785,000 to cover administrative and other costs. The total tab is about $698 million.

It comes as New Mexico – the nation’s No. 2 oil producer – enjoys a revenue boom. Economists for the Legislative Finance Committee say revenue for the two fiscal years is already tracking $500 million to $700 million higher than the most recent estimate from December.

But they also warned legislators that the revenue is difficult to forecast given the volatility in oil prices.

If approved, the new round of rebates would be in addition to tax rebates of $250 for New Mexicans who reported making less than $75,000 last year that were ratified during this year’s 30-day legislative session as part of a broad tax package.

There’s no income requirement attached to the round of rebates passed Tuesday.

Few masks

The tax legislation surfaced Tuesday as lawmakers – called to the Capitol by Lujan Grisham – embarked on a special session with a limited agenda.

Lujan Grisham issued a proclamation authorizing the Legislature to take up just three items in the session – a measure to provide economic relief to address rising costs, a revised version of the $50 million supplemental spending bill she vetoed last month and legislation paying for the session itself.

In contrast to recent sessions, only a few lawmakers wore face masks – a reflection of the steep drop in COVID-19 cases so far this year and new guidelines on pandemic safety measures.

In the Senate, a rule implemented in January that remains in place for all special sessions held this year ties mandatory face-mask wearing to guidance issued by the federal Centers for Disease Control and Prevention, which in February lifted a mask recommendation for counties deemed to be at low risk of COVID-19 spread.

As for the House, its rule requiring face masks and allowing members to participate remotely in committee hearings and floor debates expired at the end of the 30-day legislative session in February.

New Mexico special sessions cost about $50,000 per day to conduct, based on recent such sessions.

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