In the 2022 legislative session New Mexico dramatically reduced the number of people in the State that pay taxes on their Social Security. This improved upon the previous situation, but according to Money.com, “Only 10 states will still tax benefits: Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont and West Virginia.”

Completely eliminating the Social Security tax would be easy given the State’s $3.5 billion surplus, but with inflation having run rampant since 2022 it is only a matter of time before middle class New Mexico retirees will have to pay the tax.

Sadly, the Senate voted to reject an amendment offered by Sen. Cliff Pirtle (R-Roswell) that would have simply indexed New Mexico’s tax on Social Security to inflation. The following list is the vote on indexing Social Security taxes to inflation which is rated +6 for a Y vote in our Freedom Index (the vote was 20-15). All 15 Senate Republicans voted Yes. 20 Democrats voted “No.” 7 Democrats refused to vote. 

You can watch the floor debate and check the votes for yourself around the 3:50 mark of this video from Feb. 12. Unlike the House, the Senate simply records a roll call vote which we transcribed.

We recently broke down the House-passed tax omnibus package and its minor benefits for New Mexico taxpayers in the form of tax reduction along with tax hikes and various credits. Based on the entirety of the bill, we rated it a “zero” on our Freedom Index.

We didn’t have high expectations that the Senate would improve the bill and we were not disappointed. The Senate (sadly) added in the Gov.’s EV tax credit to further subsidize electric vehicle purchases (a subsidy of $50 million annually). Numerous other “green” tax credits were added into the legislation by the Senate.

Now, the Gov. has mandated EV’s and charging stations and pushed the Legislature to subsidize them.

New Mexico’s legislative session ends on Thursday at noon. Any bill not passed by both houses before then is considered dead for the session. Here are a few bad bills we’re watching:

SB 3 the Paid Family Leave bill which would raise taxes and make doing business in New Mexico harder for businesses could be up on the House Floor for final passage at any time.

HB 41 Clean Fuel Standard: This bill would force various “clean” fuels like ethanol and other biofuels into your gas tank. You can listen to our brand new podcast all about the issue here.  It is currently in Senate Finance Committee before a possible Senate vote for final passage.

HB 48 Raise Royalty rates (taxes) on oil and gas: is up in Senate Finance Committee today. If it passes out it can then be heard on the Senate Floor for final passage.

Find a list of Senate Finance Committee members here. 

On this week’s interview Paul interviews Jim Winchester. Jim is Executive Director of the Independent Petroleum Association of NM. Jim’s group specifically works with smaller oil and gas producers.

Paul and Jim discuss the various ways in which his industry is under attack in the 2024 legislative session. They discuss the economic impact of his industry and whether these attacks are new and what they actually would do to his industry and the environment.

Long before the COVID 19 pandemic we at the Rio Grande Foundation advocated for remote testimony at legislative hearings. Continuation of remote testimony is one of a small number of positives in the post-COVID era.

Alas, as the email traffic below plays out (read top to bottom) we attempted to testify before the Senate Conservation Committee on the morning of Feb. 8 regarding HB 41 (Clean Fuel Standard). Even though Gessing emailed the appropriate contact the day before to testify and was in the Zoom meeting during the public comment portion of the meeting, he was not allowed to participate.

The Legislature should ideally create some basic standards for testimony (both in-person and remote). It is already intimidating enough for people unfamiliar with Zoom to use the technology appropriately.

The following is the vote on an amendment (made to the tax omnibus bill) that would have taken New Mexico’s personal income tax rate to 1% (down from the current top rate of 5.9%).  This is the kind of legislation that New Mexico’s Legislature SHOULD be considering as a means of using the $3.5 billion surplus to grow New Mexico’s economy. It would spur economic growth while providing tax relief to all New Mexicans.

The Personal Income Tax generates about $2.4 billion annually (p. 65). This proposal would NOT eliminate the tax. But, taken as a whole New Mexico has plenty of money to enact REAL tax reform that would unleash New Mexico’s growth potential.

It will be the highest rated vote “+8” in our Freedom Index.  Did your Rep. vote in favor or against?

We’ve been waiting for the tax committees in the Legislature to come together and here it is. We’re working on a more in-depth analysis (for purposes of our Freedom Index), but here are some of the top-line items relating to the bill:

Income tax brackets (not rates) are adjusted in a way that is a slight tax cut. We analyze the concept here. It amounts to good, not great tax policy especially at a time of massive budget surpluses. This is a tax cut. 

Capital gains tax deduction is limited. If adopted it would dramatically limit New Mexicans’ ability to deduct capital gains from the sale of homes, businesses, and stock. The concept was analyzed here. This is a tax hike.

A slight increase in NM’s corporate income tax by removing the lower rate. This concept was introduced in 2023 and we discussed it here. This is a tax hike. 

Other relevant policies included in the bill include: single sales factor, a tax deduction for energy storage, a rural health practitioner tax credit, and extension of the duration of the Angel Investor Tax Credit (to name a few of the big ones).

You can find a detailed analysis of the various provisions in the tax bill here.

Some proposals that DID not make it into the bill included EV tax credits (as outlined in HB 140) and tax hikes on alcohol. We’re glad about that.

On the other hand, the capital gains and corporate tax hikes hold the bill back from being a worthwhile bill.

Thanks to Curtis Segarra of KRQE 13 for the graphic. 

Paul and Wally begin with a discussion of the most important issues being discussed in the Legislature.

The big alcohol tax hikes aren’t getting much traction, but the tax hikes contained in them are insane.

The Gov. wanted $110 million to eliminate 4 day school weeks. Rep. Armstrong got an amendment successfully adopted to allow districts to continue 4 day weeks. Here’s the vote.

14 states cut personal income taxes in 2024. New Mexico is not one of them despite its massive surplus.

Paul had an opinion piece that ran throughout the state regarding attacks on the oil/gas industry.

Nearly 3 years ago Albuquerque purchased land known as the Poole Estate. Since then it has sat collecting graffiti.

An issue with EV’s that even WE are surprised about.

HB 41 is known as the Clean Fuel Standard. It recently passed the NM House on a narrow vote with bipartisan opposition. But, in Sunday’s Albuquerque Journal (page A6) there was the following ad placed by the New Mexico Environment Department. Another version of the ad below can be seen on their site.

Using our tax dollars to advertise on behalf of higher gas prices is in line with New Mexico’s unwillingness to rein in government.

The Rio Grande Foundation is engaged with the Legislature in Santa Fe working to push this “progressive”-dominated Legislature to avoid doing harm to New Mexico’s economy and possibly do something positive with the $3.5 billion surplus it has available.

With about 1 week to go in the 30-day session there have been a number of House bills voted on and that is reflected in the scores. The Senate has taken fewer substantive policy floor votes (with a week left in the session)

You can check out our Freedom Index here. Check back as more votes are taken and after the session.

The Rio Grande Foundation has also created a brand new website. You can see a screenshot of that below. Check it out and let us know what you think.

Feb. 6 is Ronald Reagan’s Birthday and in New Mexico it has been proclaimed “Ronald Reagan Day” per a proclamation by Gov. Lujan Grisham. You can read that astonishingly good proclamation below (and wonder why MLG and President Biden seem dead set on ignoring Reagan’s successful policies.

In the meantime, watch and laugh/weep at the following interview Reagan did with late night host Johnny Carson. You can laugh at Reagan’s wit while crying about the lack of similar discussions on modern news outlets (let alone late-night TV) and you can also cry about the lack of such strong and “happy warrior” political leaders in our state and nation.

With 10 days left in the 2014 legislative session here is the latest on some bills that we’ve been tracking (and rating at our Freedom Index where we are rating and tracking the bills and legislators based on their votes).

HB 41: Over the weekend this bill passed the House (albeit with bipartisan opposition on a 36-33 vote). The so-called “Clean Fuel Standard” which would raise gas prices by empowering the Governor’s unelected Environmental Improvement Board to manage what goes into your gas tank.

HB 6/SB 3: Paid Family Leave: The House version has stalled in the House Commerce Committee (which killed it last year). SB 3 moved out of Senate Finance over the weekend. If leadership wants to pass a bill they seem likely to push SB 3 and will avoid potentially hostile committees.

HB 133: Imposes harmful new regulations on NM’s oil and gas industry. It awaits action on the House floor.

HB 129: Was amended and then passed on the House floor to include a 7-day waiting period on gun sales. Here’s the vote. 

There are other potential good and bad bills moving. We are especially watching to see what the tax omnibus package looks like.

The following appeared in the Las Cruces Sun News on Sunday, February 4, 2024.

In recent years the “left” including most, but not all in the Democratic Party have turned sharply against traditional energy sources. Despite New Mexico’s status as a leading energy state, it has not been exempted from this trend.

In fact, while New Mexico has seen an unprecedented oil and gas boom (which has unlocked unprecedented government revenues) New Mexico’s political leadership has become virulently anti-energy. This is true for all five members of its congressional delegation which all reflexively support anti-energy policies that are contrary to the State’s interests.

But the Legislature, especially since Gov. Lujan Grisham became Gov. in 2019, has turned against traditional energy sources. The first step was the Energy Transition Act of 2019. Among other things the bill shut down the coal-fired San Juan Generating Station and eliminated nuclear from the list of “green” replacement power sources. Instead, the State has now embarked upon a plan to derive 100% of its electricity combination of wind, solar, and battery backup by 2045.

The Gov. doubled down on rammed her electric vehicle mandate through her appointed Environmental Improvement Board this past fall. The plan is to radically increase the number of EV’s sold in New Mexico from the current 4.8 percent of vehicles sold to 43 percent in less than three years.

But the Gov. and Legislature had generally left the oil and gas industry alone, at least until now. The oil and gas industry have created a flood of revenues for the State. A $3.5 billion surplus last year is followed by a similar surplus this year.  New Mexico’s annual state government income has swelled by nearly 50% over just the past three years.

But, after decades of Democrat-run New Mexico politicians largely leaving oil and gas alone (while gladly spending the tax revenues the industry generates), the 2024 legislative session has seen more direct attacks on the industry.

Here are some of the bills introduced in the current session that would directly affect the oil and gas industry in New Mexico:

• HB 133 opens the New Mexico Oil and Gas Act which has governed the industry for decades and enacts language pushed by environmental groups that will have the effect of increasing regulations to the point where small operators can’t do business in New Mexico.
• HB 41 would impose a so-called “Clean Fuel Standard” directing the Environmental Improvement Board to impose regulations to regulate the “carbon impact” of gasoline. This will raise gas prices for consumers.
• HB 30 demands use of only recycled water in oil and gas operations. Using recycled water is exciting new technology, but the industry simply can’t use only recycled water at this time.
• HB 32 would require numerous onerous new regulations on most oil and gas facilities within a mile diameter of schools.
• HB 48 would dramatically increase “royalties” (taxes) on the oil and gas industry which already generates huge amounts for New Mexico.

Advancing such momentous legislation during a 30-day legislative session is a challenge. While Republicans are generally united in support of oil and gas, the industry splits New Mexico Democrats. After getting the Energy Transition Act and pushing EV’s Gov. Lujan Grisham clearly seems willing to “kill (or at least wound) the golden goose” that funds New Mexico.

This is likely only the newest front in the battle over even more restrictive policies that, if adopted, could do great damage to New Mexico’s economy.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

There are less than two weeks left in New Mexico’s short 30-day legislative session (it ends at noon on Thursday the 15th. A lot can happen over the next few weeks, but here are a few points:

1) Most of the solutions to New Mexico’s problems aren’t being seriously discussed in the Legislature. GRT reform, broad based tax reductions, onerous regulations, serious reforms to New Mexico’s failed education system, and legislation to curtail crime have either not been introduced or have already been killed.

A few minor tax reforms (and some unnecessary tax hikes) have been introduced. We await the tax package. Overall, this Gov. and Legislature are incapable of big-picture, positive economic reforms.

2) To date the most notable issues this session have been paid family leave (HB 6 and SB3) and guns. There WILL be a tax omnibus bill (HB 547 was last year’s and it was largely vetoed). That tax bill (and whether it has pro-growth tax cuts or anti-growth hikes OR mostly subsidies) will have a major impact on the overall success or failure of this session as a whole.  The Clean Fuel Standard (HB 41) and some other oil and gas bills like HB 133 could also negatively impact New Mexicans and the economy.

3) The saddest and most notable part of the session seems to be the abject lack of vision. Considering that the Democrats have held power in New Mexico for nearly a century, they seem to prefer the status quo. No major economic, education, or crime reforms means their lock on power continues (with more money available thanks to oil and gas).

On this week’s episode Paul talks to former legislator and gubernatorial candidate Rebecca Dow. Dow is now heading up the Opportunity for All Kids project for the Rio Grande Foundation. She works every day to bring education reform and school choice to New Mexico. Paul and Rebecca discuss School Choice Week, education in the 2024 session, and goals for the OAK project.

Gov. Lujan Grisham was recently crowing about the $3.5 billion investment in Rio Rancho’s Intel facility. This is a big deal for New Mexico which has no Fortune 500 companies headquartered in the state and has struggled for decades to attract private sector business outside of the oil and gas industry.

The Intel plant has been around since 1980 and after it was widely feared about 7 years ago that Intel was planning to leave Rio Rancho entirely, the latest investment in the plant is most welcome.  But it is worth noting that Intel is currently investing $20 billion in Arizona. That’s almost 6 times their investment in NM.

Arizona (while similar in many ways, but lacking NM’s oil and gas) has long had a more business-friendly political culture than has New Mexico which has led to AZ growing much faster.  We’re happy to have any private sector investment in New Mexico, but the gap between us and Arizona remains vast.

RGF president Paul Gessing recently traveled to Ruidoso, NM to participate in the Grassroots Conservative Conference put on by “One Name, One Banner” and Ben Luna.

Paul appeared on a panel with a few ranchers who are dealing with the federal government, but appearing alongside James Lindsay (self-described professional troublemaker) was a special treat.  Paul discusses regulations (and taxes) at the State level and in the Legislature.  The video below provides highlights from the presentations lasting just over 7 minutes.

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The following is the full-length conference video. You can find Gessing’s full regulation comments at 2:45 and a panel discussion on electric vehicle mandates with Johnny Johnson of the New Mexico Trucking Association which starts at the 3:25 mark and lasts for about 50 minutes.

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From federal lands to national monuments and even city parks and open space, government is often seen as an ideal protector of lands and the environment. So often left-wing environmentalists (there are free market environmentalists like the author) believe that giving the government more control and power will result in better outcomes than market forces.

One example (of many) of government failure involves the Poole Estate on the West Side of Albuquerque. As the sign below (marked by extensive graffiti) notes, nearly three years ago the City purchased the Poole Estate on the West Side, just East of Coors.

Sadly, nothing has really been done with the place. So, while it sits, graffiti “artists” get to work. The photos below are a tiny portion of the graffiti that has taken over the walls that once outlined the Poole property.

The City could remove all the graffiti tomorrow (a start), but why after three long years has nothing been done with the property?

From federal lands to national monuments and even city parks and open space, government is often seen as an ideal protector of lands and the environment. So often left-wing environmentalists (there are free market environmentalists like the author) believe that giving the government more control and power will result in better outcomes than market forces.

One example (of many) of government failure involves the Poole Estate on the West Side of Albuquerque. As the sign below (marked by extensive graffiti) notes, nearly three years ago the City purchased the Poole Estate on the West Side, just East of Coors.

Sadly, nothing has really been done with the place. So, while it sits, graffiti “artists” get to work. The photos below are a tiny portion of the graffiti that has taken over the walls that once outlined the Poole property.

The City could remove all the graffiti tomorrow (a start), but why after three long years has nothing been done with the property?

There are plenty of crazy policies discussed in Santa Fe every session. Sadly, many of them become the laws that keep New Mexico mired in last place.  One of the “craziest” bills is HB 179 which, if adopted, would MASSIVELY increase taxes on alcohol.

We have previously discussed the fact that New Mexico’s taxes on alcohol are NOT low. In fact, our tax on wine is already 5th-highest in the nation!  The following is a chart from the fiscal impact report on HB 179. It illustrates just how aggressively supporters of HB 179 are pushing to raise taxes.

According to information provided by the Committee to Unleash Prosperity, there are 14 states reducing personal income tax rates in 2024. You can see a map of those states below:

Sadly, even with massive budget surpluses New Mexico is NOT among the states working to improve its tax structure and thus its economic competitiveness. HB 252 is the best opportunity for personal  income tax reductions in New Mexico this session.

New Mexico’s elected officials are allowing the State to continue to fall behind more aggressive states.

According to information provided by the Committee to Unleash Prosperity, there are 14 states reducing personal income tax rates in 2024. You can see a map of those states below:

Sadly, even with massive budget surpluses New Mexico is NOT among the states working to improve its tax structure and thus its economic competitiveness. HB 252 is the best opportunity for personal  income tax reductions in New Mexico this session.

New Mexico’s elected officials are allowing the State to continue to fall behind more aggressive states.

Paul was recently in Ruidoso to talk about government regulations and EV mandates at a Conservative Conference. Other speakers include James Lindsay and Sheriff Richard Clarke. Ben Luna organized the event.

RGF has continued its work in Santa Fe, mostly pushing back against bad bills. Here are a few:

HB 41: Clean Fuel Standard (soon to be on house floor)

HB 133 opens up the New Mexico Oil and Gas Act which has governed the industry for decades and enacts language pushed by environmental groups that will have the effect of increasing regulations to the point where small operators can’t do business in New Mexico.

HB 48 would dramatically increase “royalties” (taxes) on the oil and gas industry which already generates huge amounts for New Mexico.

HB 140: EV subsidies.

Related to what is going on at the Texas Border:

U.S. President Joe Biden on Friday paused approvals for pending and future applications to export liquefied natural gas (LNG)from new projects

Biden vetoes bipartisan bill on “Buy American Provisions” relating to EV’s.

New tires every 7,000 miles? Electric cars save gas but tire wear shocks some Florida drivers

MLG seeks federal funding to assist in the border crisis. Why?

New Jersey plastic bag ban actually causes tripling of plastic usage.

This bill is up in House Tax on Wednesday.

Handicapping the likelihood of tax bills in the New Mexico Legislature is really hard because they are compiled behind closed doors. Last year the Legislature was rather ambitious and wound up with a disastrous bill that even Gov. Lujan Grisham didn’t like. 

The Legislature seems to be far less ambitious this year and with only 30 days to pass something, that’s no surprise. House Bill 252 would be a bill worth including as it provides tax relief (targeted at lower income levels) for income tax payers in New Mexico.  It is sponsored by Rep. Lente, a Democrat and chair of the House Tax Committee.  You can read the analysis here. 

The rates would be: 1.5%, 3.2%, 4.3%, 4.7%, 4.9%, and 5.9%. The tax reduction would start out around $150 million and would rise somewhat over time. While this is by no means the tax reform/reduction we’d design, it is worthy of support and worth consideration by the Legislature.

Perhaps they would consider adding a provision to index these tax rates to inflation?