SANTA FE, N.M. (KRQE) – Expressing some concern over the “unpredictable nature of the economy and our State’s reliance on oil and gas revenues,” New Mexico Governor Michelle Lujan Grisham has removed large portions of an omnibus tax bill passed by lawmakers. With key provisions crossed out, she did sign into law another round of tax rebates and some tax credits.
A key focus during the 2023 lawmaking session was an omnibus tax bill (House Bill 547) that would have adjusted a wide range of tax laws around the state. The bill put together by lawmakers sought to change New Mexico’s income tax brackets, set a single corporate income tax, and offer a range of tax credits among other things.
Friday, April 7, Governor Michelle Lujan Grisham line-item vetoed large portions of that bill. And she explained her reasoning in a letter to lawmakers.
“Although HB 547 has many laudable tax reform measures, I have grave concerns about the sustainability of this tax package as a whole,” she wrote. The tax cuts “will impact our ability to fund important services and programs that our citizens depend on, such as education, healthcare, public safety, and infrastructure.” She also said the bill would disproportionately harm those who are already struggling financially.
But, the Governor did approve other parts of the tax package, including another round of tax rebates, an increase to the child income tax credit, film credit benefits, and an expanded gross receipts deduction for health practitioners.
The omnibus tax package would have been the most comprehensive tax reform in the state in years. And to get the bill to the Governor’s desk, lawmakers in both the House and Senate worked to compromise and overcome a stalemate regarding the bill.
Ultimately, it wasn’t enough. In her letter to lawmakers, the Governor called for “a more thoughtful approach.”
“I appreciate the Legislature’s willingness to consider such sweeping tax reform. But as Governor, it is my duty to prioritize the needs of all New Mexicans, and I believe that we must take a more thoughtful and deliberate approach to tax reform,” she wrote.