HB 14: a mediocre bill goes bad

Let’s be honest: the Democrats who control Santa Fe have Zero interest in growing New Mexico’s economy. They DO wish to penalize the oil and gas industry by raising taxes on them, however. Enter HB 14 which recently passed the New Mexico House.

In it’s original form HB 14 was questionable. It was an increase in the generosity of New Mexico’s version of the Earned Income Tax Credit. In its original (and final) forms, while the bill would have reduced tax for many low-income New Mexicans, it would also be “refundable” meaning it is now additional spending. The bill would create (even bigger) payments to those with incomes too low to pay taxes under New Mexico law. As originally designed it was a “-2” in our Freedom Index. RGF strongly supports tax cuts for ALL New Mexicans that pay taxes, but we are NOT fans of creating additional spending programs tied to federal welfare programs.

As if that were not bad enough, Democrats added new taxes on oil and gas (originally contained in HB 548) to the bill. Now, the proposal is a “double whammy” with tax hikes on oil and gas AND the new, “refundable” credit in the bill. RGF has made its score even more negative with a “-6” rating.

Raising taxes on New Mexico’s most important industry is inexcusable at a time of record surpluses and when the state is sitting on massive piles of cash. Creating additional spending program swamps the benefit from limited tax relief contained in the bill. The bill will soon be heard in the Senate Tax, Business, and Transportation Committee.