Lawmakers in both chambers adopt tax compromise in session's final hours
The House and Senate both adopted a compromise tax package on a voice vote late in both chambers Friday night, after hours of negotiations and a failed vote earlier in the day on the multimillion dollar tax package.
The conference committee mended the rift exposed between chambers over the tax package on Thursday — just later than expected. At about 9 p.m. the heads of the tax committees, Rep. Derrick Lente (D-Sandia Pueblo) and Sen. Carrie Hamblen (D-Las Cruces), presented a much smaller package of benefits, and eliminated a new tax on oil that had previously funded the whole measure.
Instead, the Legislature will pay for the $113 million dollar compromise package of tax credits from the state's reserves, which will be pulled from next year's budget. Lente said other options were considered, but ultimately discarded, because of the time crunch of mere hours left in the session.
In the compromise package: an Earned Income Tax Credit for lower-income single people and families; removal of gross receipts tax on medical services; a 20% increase in liquor at the wholesale price expected to generate $10 million a year for a tribal alcohol alleviation fund; and a tax credit for foster parents and guardians caring for children.
What didn't make the cut: 0.28% tax on oil paired with a reduction in natural gas taxes contained in House Bill 548 expected to generate $130 million in revenue; and a series of other tax credits for emergency responders, search and rescue, publishers and newspaper printers and quantum facilities.
The increase in the Earned Income Tax Credit will benefit the approximately 200,000 who qualify currently for the Working Families Tax Credit and expand to about 100,000 more New Mexicans, Lente said. The credit allows people making minimum wage, to families of three up to $70,000 annual income to not pay state income taxes.
'That's a far reaching, very broad benefit that we would be able to protect in this tax package,' Lente said Friday evening.
Hamblen said the pieces that failed to make it into this year's package will be reconsidered in the future.
'I think we've got this really great foundation,' she said. 'We've got our hopes and dreams of what we need to look at next year and I'm excited about that.'
Rep. Mark Duncan (R-Kirtland) was the lone vote against the package, saying he thought using reserves to pay for the tax package was 'a bad way to do business,' and noted the Legislature was paying $171 million from reserves to balance the budget this year, in addition to the tax package.
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