Twelve hours and done! That is all it took for the New Mexico legislature called into a special session on April 5 to spend $698 million on tax rebates and cash payments and another $50 million spending package for upwards of 500 projects designated by lawmakers throughout the state. It was Governor Michelle Lujan Grisham’s controversial veto of the $50 million in projects passed during the 2022 regular session that prompted the “special session” in the first place. The cost of special sessions is about $50,000 per day.
TAX REBATES
House Bill 2 was the tax rebate bill legislation. It passed the House on a 51-13 and a few hours later won Senate approval on a 35-1. The overwhelming support in both the House and Senate results in the measure going into effect immediately upon the signature of Governor Lujan Grisham.
The enacted legislation provides for $500 in tax rebates to individual filers and $1,000 to married couples filing jointly. An estimated 1.4 million New Mexicans, or upwards of 66%, of the state’s population will qualify. All tax filers will be paid automatically. Half of the rebates will be paid by the end of June, and the second half will be paid in August.
There is no income requirement attached to the round of rebates as was the case with the rebates passed in the regular session. The new round of rebates passed will be in addition to tax rebates of $250 for New Mexicans who reported making less than $75,000 last year that were ratified during this year’s 30-day legislative session as part of a broad tax package.
People who do not pay taxes, such as low-income seniors, will have to apply for their rebates. The enacted legislation creates a $20 million fund that will provide similar payments to non-taxpayers. Applicants will get a cash rebate on a first-come, first-served basis until the funding is exhausted.
The total cost of the rebates is upwards of $677 million, spread equally between this and next year’s budgets. The enacted legislation sets aside $20 million for payments to non-filers and $785,000 to cover administrative and other costs. The final cost is upwards $698 million.
Los Alamos Democrat Rep. Christine Chandler, a and co-sponsor of the bill, said the legislation will help New Mexicans facing high gasoline costs and other price increases. Chandler has this to say on the house floor before passage:
“It’s intended to lift the burden on so many households in New Mexico.”
The state can afford the rebates in large part because New Mexico has become the nation’s second largest oil producer in the country and for the last 2 years has had significant increases in revenues. Economists for the Legislative Finance Committee report that revenues for the 2 fiscal years is already at $500 million to $700 million higher than the most recent estimate from December.
REUBLICANS ALWAYS FINDING REASONS TO COMPLAIN
When the special session was first announced, Senate Minority Leader Greg Baca, a Republican from Belen, called the decision to hold a special session a political stunt and said in a statement:
“This special session is nothing more than a desperate attempt by the Governor to salvage her bid for reelection. … Her vindictive veto of a reasonable spending bill to fund law enforcement equipment, senior centers, aftercare programs, and other needs is inexcusable.”
Once the special session began, Democrats unanimously supported the legislation while Republicans were split, especially in the House. Republicans, even though they voted for the measure, still found reasons to complain about passage of both measures.
Republican opposition complained about immigrants, questioned the legality of parts of the legislation, questioned the timing of the assistance and whether one-time rebates and relief payments are an effective and sustainable way to address inflation and complained about the broken tax system. Republican Rep. Jack Chatfield of Mosquero said “This rebate will not fix New Mexico’s broken tax system” knowing full well fixing the New Mexico’s tax system was not the reason for the special session.
Republicans again harped and complained about immigrants and allowing immigrants,regardless of legal status, to qualify for the tax rebates. House Minority Whip Rod Montoya, R-Farmington, went so far as to say lawmakers “need to have the debate openly” on who could benefit from the assistance.
Republican Representative Ryan Lane seemed to take issue with his own parties leadership about immigrants when he said:
“I just think the issue is not really whether you’re undocumented or not, that’s not my problem. It’s are you paying taxes into the state system because again, we’re talking about taking taxpayer dollars that we can now collect from our citizens and return those back to the citizens again.”
House Majority Leader Javier Martínez, D-Albuquerque, said immigrants, regardless of legal status pay taxes and deserve to qualify for economic relief the same as anyone else. Martínez had this to say:
“We can disagree on policy all day long. … We should never revert to dehumanizing other people. You know, over the last few weeks because of this global crisis in oil prices, fuel prices, too many New Mexicans have had to make a choice between putting food on the table and filling up their gas tank with gas.”
Democrat Representative Roger Montoya had this to say:
“Anytime we can bring relief to our families, I’m a big supporter of that. I think that this particular rebate gas tax, whatever they want to call it, is useful. I think it will help. I think it’s probably not enough in the bigger picture because inflation is increasing at a rate that is devastating to those working families.”
Republican lawmakers also debated the timing of the payments in an election year when all 70 House seats and statewide offices, including the governor, the attorney general and the secretary of state, are on the ballot. The primary election is June 7, and the general election is November 8.
Republican Representative Randal Crowder, R-Clovis, noted that the second rebate payment would come amid the general election campaign and had this nasty little observation:
“If the public is hurting, front the money. … It appears this is somewhat a political decision rather than a fiscal decision to split it into two buckets of money.”
Democrats strongly disputed political motivations shaped the payment schedule. Democrat Rep. Christine Chandler said the intent was to spread the payments over 2 fiscal years to avoid having the current fiscal year taking the full hit. The current fiscal year end June 30 and the new fiscal year begins July 1, 2022 and ends June 30, 2022.
The links to quoted news sources are here:
https://www.abqjournal.com/2485779/special-session-underway-at-roundhouse-2.html
After the special session ended, the state Republican party released a statement blasting the the rebate measure as a “political stunt” even though 21 of the 35 legislative Republicans, both senators and representatives, voted in favor of the rebate legislation. Kim Skaggs, the executive director of the Republican Party of New Mexico had this to say:
“These rebates are another manipulative move by the Governor and amount to bribery for votes.”
Republican Senator William Sharer, who pushed for even larger rebates during the regular session, said during the single-day special session that he viewed the financial relief as more of a refund than a rebate and said this during a Senate committee hearing:
“This isn’t a gift from anybody, the way I see it. … This is taxpayer money that was simply more than we needed.”
https://www.abqjournal.com/2486266/hefty-tax-rebates-mark-fiscal-shift-for-new-mexico.html
$50 MILLION SPENDING PACKAGE PASSES
On March 9, Governor Michell Lujan Grisham announced that she had vetoed Senate Bill 48, also known as the “Junior Bill” enacted by the 2022 New Mexico 30-day legislative session that ended on February 17. The bill would have authorized $25.2 million in one-time spending and another $25.2 million in ongoing spending. The bill was crafted by the individual legislators and was in addition to the $8.5 billion budget and the $827.7 capital outlay bills.
Senate Bill 48, gave each lawmaker a certain amount of money to allocate as they chose. Members of the House got $360,000 each and senators had $600,000. It passed by unanimous votes. The money would have gone to a wide-ranging set of programs and priorities picked by lawmakers. Governor Michelle Lujan Grisham vetoed the measure saying it did not represent sound fiscal policy with some projects not fully vetted, some still in the design stage and some projects not fully funded.
The Governor’s veto of Senate Bill 48 resulted in a very public clash between lawmakers and the Governor. There was a growing number of New Mexico legislators, including Democrats, who expressed support for calling themselves into “extraordinary session” to allow them to override Governor Lujan Grisham’s veto of a $50 million spending bill. After a few weeks of back and forth discussions between the Governor and legislative leaders, the Governor agreed to convening a special session with a two item agenda: tax relief and rebates and another version of the $50 million “Junior Bill.”
On April 5, the both the New Mexico House and Senate moved quickly during the special session to enact Senate Bill 1 spending $50 Million for upwards of 500 projects that legislators had proposed. Senate Bill 1 passed the Senate on a 39-0 vote in the afternoon and sailed through the House 63-0 a little after 8 p.m., a mere 11 hours after the session started.
Senate Bill 1 is essentially a rewrite of Senate Bill 48 that the Governor had vetoed. Some technical changes were made and $200,000 worth of projects were removed. The enacted bill does contain a major change improving the legislation. Legislators agreed to a requirement that each lawmaker’s funding allocations in the spending bill be disclosed publicly. Legislators reworked the language to provide more information on their projects. Projects included in the bill will be posted no later than 30 days after adjournment of the special session, or by May 5.
Lujan Grisham spokeswoman Nora Meyers Sackett said the “transparency provision” was critical for the Governor’s support and she had this to say:
“The governor’s veto of the previous iteration of the bill hinged in part on the lack of transparency in the junior bill appropriation process. …In working with the Legislature to revise and improve the bill, she has been abundantly clear about her expectation that information delineating what funds were allocated by each legislator is published.”
People will be able to go online and see what that money would be used for in their areas. Democrat Senate Majority Peter Wirth has this to say:
“30 days after today, all the member project lists will be disclosed. So there will be a searchable database just like with capital outlay projects so you will be able to see exactly what I, Senator Wirth, put into the Junior Bill. Again, that was something that was flagged and I believe we addressed.”
Not surprising, Republicans again complained and questioned the Governor’s motives. Republican State Senator Crystal Diamond of Elephant Butt suggested the governor’s veto of the original “Junior Bill” enacted was a “punitive” act not motivated by transparency concerns. Diamond said lawmakers had added many transparency measures in recent years.
Links to quoted news sources are here:
COMMENTARY AND ANALYSIS
It is pretty pathetic that New Mexico Republicans are so malcontent about anything Democrat Governor Michelle Lujan and Democrats do to the point that all they do is “piss and moan” about legislation they vote for in a special session.
What Republicans are likely upset about is that the Governor managed to upset the entire legislature, including Democrats, with her veto of the Junior Bill, and then dramatically turned things around working with the Democratic leadership and calling a special session on her own terms that results in passage of $698 Million for tax rebates and $50 Million for 500 capital projects legislators wanted satisfying both groups.
Republicans must complain because they can take little comfort in having a TV weatherman “blowhard” who knows New Mexico only from a green screen and a wild eyed, right-wing Trump extremists riding a horse leading a posse looking for “radical socialists” and wanting to build a wall as their front runners for Governor.