Governor signs budget and tax package before deadline, but vetoes disaster response bill 

SANTA FE — In a busy end to her final bill-signing period, Gov. Michelle Lujan Grisham signed off Wednesday on an $11.1 billon spending plan and a tax package that includes hefty incentives for New Mexico physicians.

Lujan Grisham, who is set to step down from office at the end of this year, specifically cited investments in universal child care, public safety and health care as hallmarks of her administration.

“We’ve built a strong foundation of opportunity for New Mexico families, and while this budget marks a massive leap forward, our work is far from finished,” she said in a statement.

But the two-term governor used her line-item veto authority to ax some budget provisions, including language that child care assistance be prioritized for low-income families.

Lujan Grisham also vetoed two bills, including a measure changing the process for how the state responds to wildfires, floods and other natural disasters.

The governor, who authorized nearly $257 million in emergency spending in the last budget year, said the legislation, House Bill 180, would have made responding to natural disasters more difficult by imposing a cap on such spending without legislative approval.

Rep. Harlan Vincent, R-Glencoe, one of the sponsors of the bill, said he was disappointed by the governor’s veto, but expressed gratitude that $21 million in state matching funds for parts of New Mexico covered by federal disaster declarations was left in place in the budget bill.

He said the funding could be used to help relocate houses in the Ruidoso area after wildfires and subsequent flooding in the area over the last two years.

“I would feel much better if people were off the (Rio Ruidoso), and we could restore it back to its natural state,” Vincent told the Journal. 

From a political perspective, the governor’s decision to leave largely intact the $11.1 billion budget bill that will increase state spending by about $339.5 million — or 3.1% — over current levels means no special session will likely be required before a new state fiscal year begins in July.

The governor vetoed about $4.5 million in proposed spending from the bill, including $1 million for a proposed sports hall of fame and an additional $500,000 from a proposed lowrider museum in Española. 

As in past years, she also vetoed some budgetary language that sought to impose strict timelines and other restrictions on certain legislative appropriations.

Tax package signed despite concerns

A year after vetoing a tax package passed by lawmakers, Lujan Grisham signed off on this year’s bill that includes a grab bag of tax breaks and policy changes.

Specifically, this year’s tax package, Senate Bill 151, includes a $10,000 personal income tax credit for physicians who practice full-time in the state and a $4 million annual tax credit for local news organizations.

It also includes a 1% salary increase for state workers and teachers, which was added to the bill by the state House after being removed in a Senate committee.

In her executive message to lawmakers, Lujan Grisham said she supports the pay raise for state employees — it will take effect on July 1 — but described it as an “odd” decision to include it in tax legislation.

“While I assume the Legislature did not want to create a logjam in the waning days of the 30-day session, rolling this provision into the tax bill created more confusion than necessary,” the governor wrote.

Lujan Grisham also expressed concern that a provision in the tax package to decouple parts of the state’s corporate income tax system from the federal tax code could lead to “double taxation” on some businesses.

But she did not strike out the provision from the tax bill, instead leaving it in place to take effect next January.

Vetoes at lowest level in years 

In all, Lujan Grisham signed 71 of the 74 bills approved by lawmakers during the 30-day session that ended Feb. 19.

Of the three bills vetoed by the governor, one died under what’s known as a “pocket veto” when the governor did not act on it before the Wednesday bill signing deadline. That bill would have modified an existing space commission working group.

The ability for governors to pocket veto bills could be eliminated starting next year, if state voters pass a proposed constitutional amendment on the issue in November.

Overall, however, the governor’s use of her veto pen was far less prolific than in previous years. Last year, for instance, Lujan Grisham vetoed 35 bills passed by lawmakers, including a proposal to make tortilla the official state bread. 

Dan Boyd covers state government and politics for the Journal in Santa Fe. Follow him on X at @DanBoydNM or reach him via email at dboyd@abqjournal.com.