Copyright © 2022 Albuquerque Journal
SANTA FE – New Mexico is already providing up to $1,500 in tax rebates to taxpayers this year with the state awash in revenue, but Republican gubernatorial candidate Mark Ronchetti said Tuesday he wants to make the rebates an annual occurrence.
A proposal released by Ronchetti would mean a $100 annual rebate for every New Mexican – including children – for every $1 billion the state collects in oil and natural gas revenue, which would likely mean less money flowing into an early childhood trust fund.
It could also mean less funding available for other state programs in cash-flush years, though Ronchetti’s plan would include a trigger mechanism to adjust the size of the rebates in the event of steep revenue downturns.
Fundamentally, Ronchetti said he’d rather the money go directly to families than to state government spending.
“New Mexicans deserve to benefit directly and regularly from oil and gas royalties, and choose for themselves how to spend and invest those funds,” Ronchetti said in a release. “This plan gives our families a direct stake in the industry, each and every year.”
Unlike other states like Alaska, New Mexico does not routinely provide tax rebates or dividends to its residents in cash-flush years and at least one previous round of rebates had to be scaled back due to revenue volatility.
That occurred in 2008, when tax rebates proposed by then-Gov. Bill Richardson in a special session were trimmed to $50 per single taxpayer amid an economic downturn.
Rep. Patricia Lundstrom, D-Gallup, the chairwoman of the Legislative Finance Committee, said Tuesday that mandating annual tax rebates would be an “irresponsible” approach to budgeting.
“I would never agree to something like that until I knew what the revenue amounts were,” Lundstrom told the Journal.
This year’s rebates are funded by the state’s oil-driven revenue bonanza. They were passed by lawmakers in two separate bills this year and signed into law by Gov. Michelle Lujan Grisham, a Democrat who is seeking reelection this year.
The first round of $250 rebates – or $500 for married couples filing jointly – were sent out last month, though some eligible New Mexicans are still waiting for their rebate checks to arrive.
The second round of rebate checks are being sent out this month, with a final round scheduled for August.
While Lujan Grisham previously questioned whether rebates would help grow New Mexico’s economy, the governor said this year’s financial relief payments will help New Mexico families pay for food and other basic supplies.
In addition, a Lujan Grisham campaign spokeswoman described Ronchetti’s proposal on Tuesday as a “fiscally irresponsible socialist scheme” and said it would eliminate funding for the state budget.
New Mexico political scientists have said state residents have been hit particularly hard by recent inflation related cost 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.
Meanwhile, New Mexico has one of the nation’s most volatile revenue streams, due largely to fluctuations in oil and gas prices and production levels.