Affordability debate hits Roundhouse, with divergent plans for addressing rising prices

SANTA FE — The national debate over rising consumer prices and tariffs has hit the Roundhouse.

Top House Democrats signaled Monday they plan to expand a working families tax credit, which in 2024 provided a tax break for families making up to $66,819 in adjusted gross income.

As of last year, that state tax break provided a $1,957 credit for eligible married couples with three or more children.

Majority Democrats also voiced support for legislation that would curb retailers’ ability to use “dynamic pricing,” a strategy that adjusts prices due to supply and demand trends, amid a surge in egg prices, among other items.

“We’re here to tell the people of New Mexico that no matter what happens in Washington D.C., we House Democrats have your back and we’re going to make sure we keep things affordable for you and your families,” House Speaker Javier Martínez, D-Albuquerque, said during a Monday news conference.

New Mexico Republicans, for their part, have voiced support for broader tax cuts with the state riding a multi-year revenue wave prompted by record-high oil production levels.

A bill proposed by five GOP lawmakers, House Bill 275, would do away entirely with the state’s personal income tax.

Currently, only nine states — including Texas, Nevada and Florida — do not impose an income tax, according to the Tax Foundation.

Rep. Elaine Sena Cortez, R-Hobbs, said abolishing the personal income tax would help New Mexicans while also stimulating the state’s economy.

“I believe the elimination of the personal income tax would help people actually spend their moneys on groceries, and gas and the things that they need,” Sena Cortez told the Journal.

New Mexico collected an estimated $1.8 billion in personal income tax revenue in 2023, according to state Taxation and Revenue Department data, but Sena Cortez said the state could make up for the drop in revenue with increased economic activity.

She also said some residents of her southeast New Mexico district currently start businesses in neighboring Texas because of the more favorable tax environment.

“People choose other states that we’re competing with for workers,” Sena Cortez said. “They are choosing favorable states that don’t have the tax structure and burden that we have.”

The state-level debate over tax relief is playing out during the first month of Donald Trump’s return to the White House.

House Democrats on Monday accused the Trump administration of driving up prices for basic goods by threatening new tariffs against neighboring countries, even though inflation hit a four-decade high during former President Joe Biden’s tenure.

They also indicated they will push for targeted tax relief for New Mexicans during this year’s 60-day session, instead of broad tax cuts or rebates for tax filers.

“Let’s be clear about this: Millionaires don’t need a tax cut,” Martínez said. “They’ve had a lot of tax cuts over generations and, in fact, Trump is going to give them another tax cut.”

He also said that Trump’s vow of a mass deportation campaign targeting undocumented immigrants could lead to higher prices for eggs, milk and other products in New Mexico.