The mess that became HB 14 (the tax bill this session)

If you talk to anyone in Santa Fe, the Legislature is an absolute mess. Republicans aren’t happy, most Democrats aren’t happy, and the recent 60-day session failed to address in any serious way NUMEROUS important issues facing our State. We recognize that the “sausage” making process is not pretty, but here’s just a BIT of the story of HB 14 (which became the tax bill) this session. You can check out the whole legislative history here.

The issue begins with the budgets proposed by the Legislature and Gov. They included NO room for tax cuts.

The bill began as an expansion of New Mexico’s earned income tax credit. We’re NOT big fans of this because it is both “refundable” meaning it results in payments made to those earning little to nothing, but it also does nothing to reduce tax burdens for ALL taxpayers (as expanding the standard deduction or zero tax bracket would).

THEN, an oil and gas tax (HB 548) was added to HB 14 (the tax hike was meant to “pay for” the tax credit portion and passed on March 15. RGF rated that bill “-6” and it passed with only Democrats in support.

Then, a number of other tax credits were added into the bill AND a small alcohol tax was added as well, but on the Senate floor the tax hike on oil and gas was pulled out. So, RGF rated the bill “+2” since we STILL don’t like the “refundable” credits or the original, small alcohol tax hike.

But, the House and Senate now disagreed. And, while RGF would have been perfectly happy to let the bill die it was amended again in a “conference” behind closed doors. Now, we are back to a bill that has the tax credit AND a more substantial (20% increase) in alcohol taxes. This bill was passed by both houses as “conference report” in the legislative language. We are trying to find legislative votes for those but they are currently not published on the Legislature’s website.

The sausage making process would be bad enough if the ultimate product were a good one. Sadly, it is not. While Democrats continue to keep legislative majorities with little accountability and continued awful policies, Republicans should follow Grover Norquist’s lead and oppose on principle any and all tax hikes like those adopted in HB 14.

UPDATE: We have received word from Legislative Council Services that the concurrences were unanimous in both houses.