Like few governors in the history of the United States, New Mexico Gov. Lujan Grisham has benefited from extremely favorable budgetary conditions. With New Mexico oil production having more than quintupled just since she took office (and showing no signs of slowing) the State has seen massive revenue growth.
If ever there was a state with the means to break free from its moorings at the bottom of all the good lists and the top of all the bad ones, this would be the time. Instead, Gov. Lujan Grisham’s budget is more of the same: massive spending growth and (potentially) some modest tax reforms. It’s not that everything is bad, but it is clear that MLG doesn’t have “the vision thing.”
The plan includes $750 rebates for single filers and $1,500 for joint filers and would total $1 billion. We have discussed the pros and cons of rebates here.
The Gov. has even proposed $500 million in tax relief, in part through cuts in some income tax rates and lower statewide gross receipts taxes on sales and services. The Rio Grande Foundation has consistently pushed for GRT reform rather than small rate reductions. Sadly, it seems that no matter how much money they have available Lujan Grisham and the Democrats just don’t have an interest in reforming New Mexico’s broken tax code.
Tax cuts and even rebates are nice. More spending is inevitable given the numbers. Sadly, none of this will “move the needle” on New Mexico’s serious economic and social challenges and thus represents a mostly lost opportunity.