Gov. signs 'historic' tax rebate package - Albuquerque Journal

Gov. signs ‘historic’ tax rebate package

Senate Majority Leader Peter Wirth, D-Santa Fe, talks to fellow senators during a special session at the Roundhouse this week. Gov. Michelle Lujan Grisham on Friday signed two bills approved during the session, a $698 million financial relief package and a revised $50.2 million spending bill. (Eddie Moore/Journal)

Copyright © 2022 Albuquerque Journal

SANTA FE – In a move aimed at delivering at least temporary relief from rising gas and grocery prices, Gov. Michelle Lujan Grisham approved Friday a package providing $500 rebates for New Mexico taxpayers – or $1,000 for married couples filing jointly – that will be spread out over two checks.

The $698 million financial relief package was approved by legislators during a single-day special session this week and will be in addition to separate rebate checks approved by lawmakers in February.

“We don’t want anyone to be in a position not to be able to afford food for their families,” Lujan Grisham told reporters during a remote Friday news conference.

The Democratic governor, who is caring for her ailing mother, also said her administration and lawmakers would continue to look for ways to provide financial relief to New Mexicans amid an oil-fueled revenue bonanza.

But the rebates could also be a political boon in an election year in which Lujan Grisham is seeking reelection to a second four-year term.

University of New Mexico political science professor Gabriel Sanchez said New Mexicans have been hit particularly hard by recent cost-of-living increases, since the state has one of the nation’s lowest per capita income levels at $49,320, according to the U.S. Bureau of Economic Analysis.

Governor Michelle Lujan Grisham

“The governor will obviously benefit from being able to point to the relief the state has and continues to provide to voters,” Sanchez told the Journal. “However, the rising costs on not only gas, but housing will continue to be major concerns for voters so having longer-term solutions to these challenges will be something all candidates for governor must be able to put in front of voters.”

New Mexico is not alone in approving rebates to help residents cope with rising inflation, as states from Maine to Minnesota are also considering direct financial relief for residents.

Specifically, half the total amount of new rebates cash approved Friday by Lujan Grisham will go out by the end of June, with the remainder to be sent in August. New Mexicans who filed 2021 tax returns will get the money automatically.

The proposal, House Bill 2, 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.

Several top Democratic legislators joined the governor for Friday’s news conference, with House Majority Leader Javier Martinez, D-Albuquerque, describing the financial relief as “record investments in working New Mexicans.”

“I think we’ve delivered for New Mexicans,” added Senate Majority Leader Peter Wirth, D-Santa Fe.

The tax rebates are possible because of a New Mexico budget bonanza driven by increased oil production and an uptick in consumer spending.

Rising revenue levels allowed lawmakers to craft a record-high $8.5 billion budget plan during this year’s 30-day legislative session that will boost state spending by roughly $1 billion – or nearly 14% – over current levels.

Despite the spending growth, New Mexico legislators have still set aside big chunks of money in several state savings accounts.

While new official estimates will not be released until this summer, legislative economists say revenue for the current and coming fiscal years is already tracking $500 million to $700 million higher than the most recent estimate from December.

“People are hurting and we have a responsibility to make sure the people of New Mexico benefit from the record revenues the state is seeing,” said Rep. Christine Chandler, D-Los Alamos, one of the key architects of the financial relief package.

She also said lawmakers would work toward crafting more sweeping changes to New Mexico’s tax code in advance of next year’s 60-day legislative session.

Meanwhile, Lujan Grisham also signed into law Friday a revived $50.2 million spending bill, Senate Bill 1, that contains funding for uranium mining cleanup, new police vehicles, domestic violence services and other projects.

The governor vetoed a previous version of the measure in March, saying it did not represent sound fiscal policy.

But the legislation, known as the “junior” spending bill, was brought back for the special session after negotiations between the Governor’s Office and top-ranking legislators led to an agreement and some changes, such as a requirement that each lawmaker’s funding allocations in the bill be disclosed publicly.

The deadline for posting how lawmakers divvied up their available dollars in the spending package is 30 days after the special session’s end, or May 5.

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