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Senate signs off on reworked tax, infrastructure bills

SANTA FE — Just before midnight, the New Mexico Senate approved two ambitious bills that could be part of a budget package making its way to Gov. Susana Martinez’s desk.

One of the measures is a complicated tax bill that includes the elimination — starting in two years — of dozens of gross receipts tax deductions, but not the tax break on food items. That will give lawmakers time to study the impact of the move, backers said.

The elimination of those tax deductions was included in a massive tax overhaul bill sponsored by Rep. Jason Harper, R-Rio Rancho, that’s received hours of debate this session.

But senators said the Harper bill was too far-reaching to pass in this year’s legislative session, so they tacked some parts of it onto a separate House-approved bill that also calls for the creation of a new state “rainy day” fund.

“The package as a whole will be difficult to lift in this legislative session,” said Sen. Carlos Cisneros, D-Questsa, during tonight’s floor debate.

The bill, House Bill 191, ultimately passed the Senate on a 36-5 vote and now goes back to the House for final approval.

Meanwhile, the other measure approved is the annual¬†capital outlay bill — but with a twist.

The legislation, Senate Bill 462, would send roughly $46 million to school districts statewide to offset funding reductions enacted earlier this session to help a budget gap.

The money in the new plan would be freed up by shifting the funding source of already approved infrastructure projects. Top legislative staffers described it as an “accounting change,” but some lawmakers expressed uneasiness.

“I’m not too sure about bonding for operational expenses,” said Sen. John Sapien, D-Corrales, during a committee hearing earlier Thursday. “This is a challenging way to finance government.”

Gov. Susana Martinez and House Republicans have called for this year’s available infrastructure funds to be used to help balance the budget, and the plan would apparently meet that objective — at least in part.

In addition to backfilling school district budgets, the bill would also appropriate $26.2 million for new projects, including upgrades to prisons, roads and a state campaign finance database.

It passed the Senate on a 33-8 vote and now goes to the House.