New tax credits for foster parents, volunteer first responders proposed

SANTA FE — Tax credits and breaks for volunteer first responders, foster parents, local journalist employers and health care providers are among the Senate additions to this year’s tax package.

A new 0.28% oil surtax proposed in House Bill 14 would generate about $130 million in revenue for the state in fiscal year 2026. The House wants to use $72 million of that to pay for the elimination of personal income taxes for certain individual and joint tax filers, calculated with a working-class income threshold.

That leaves about $58 million for the Senate to use as desired. The Senate Tax, Business and Transportation Committee on Tuesday, on a party-line vote, added a comprehensive package of tax credits and breaks to the bill — adding up to about $70 million.

Senate Tax Committee Chair Carrie Hamblen, D-Las Cruces, said the amendments complement the House’s tax package efforts and ensure all legislators “bring back to our communities something that will positively impact the residents in our districts.”

The additions include more than a dozen tax credits and gross receipts tax deductions for volunteer emergency medical services, firefighters, and search and rescue; local journalist employment; local news printer owners; foster parents or appointed guardians; quantum facility infrastructure; and health care commercial contract services and certain Medicaid services.

House Bill 14 would also increase liquor excise taxes and create a new university school of medicine fund.

But the additions to the tax package cause total funds to spill over the $130 million cap. That’ll likely result in a discussion between the House and Senate, known as a conference committee, before the end of the session so the chambers can come to a compromise, according to House Tax Committee Chair Derrick Lente, D-Sandia Pueblo.

He told the Journal after the Senate committee that’s not necessarily a bad thing, and the bicameral chambers have had better communication this year compared to the past. He added that he supports many of the tax breaks and credits the Senate put in the package, though he’s concerned about the poor precedent the gaming tax exemption could set.

“If we happen to go to a conference, then I would hope that these matters, or any matters related to this tax package, would be alleviated quickly,” Lente said.

Public comment in the Senate committee mirrored that of House Taxation and Revenue’s, with energy and business leaders voicing discontent with the bill’s proposed oil surtax while other advocates lauded the tax break for working families.

But the committee debate wrapped in under a half-hour, not regurgitating long discussions had in the House chamber on the tax package. Lente noted that no committee members had anything to say on the oil surtax — Republicans this year have repeatedly opposed adding financial burdens to the oil and gas industry — but more talk about that could come on the Senate floor.

“It felt a little bit too orchestrated with how quickly it passed, how smooth it was. Maybe they have something else coming up, which is fine — that’s for them to manage,” he said.

A couple of committee Republicans, all four of whom voted against the tax package, said there are good and bad parts to the package, and they appreciated being included in its drafting.

Senate Minority Leader William Sharer, R-Farmington, also failed in committee to add an up to $100,000 microgrid tax credit for poverty-immersed areas to the package.

The full House passed the tax package over the weekend 40-27, sending it to the Senate side of the Roundhouse. Rep. Joseph Sanchez, D-Alcalde, joined Republicans in voting against the bill.

Lente said he feels positive that there’s still enough time to iron out the tax package and deliver it to the governor before the end of the session. The full Senate could hear House Bill 14 as soon as Wednesday morning.

“We’re super close,” Lente said.