New Mexico governor vetoes tax package, again slams lawmakers

Yahoo

12-04-2025

Gov. Michelle Lujan Grisham used the power of her pen Friday morning to veto 16 pieces of legislation, including a key tax package that would have extended relief to an estimated 100,000 middle-income New Mexicans.
She issued a veto message tearing into the Democrat-controlled Legislature for waiting until the final days of the session to pass the tax measure.
The two-term Democratic governor also laid bare her ongoing frustration with state lawmakers on the public safety front as she rejected a series of proposals to add new specialty license plates to the state's list.
'In a session where the Legislature found time to pass three separate license plate bills and designate an official state bread, it is deeply disappointing that they waited until the final days — indeed, the final hours — of the 2025 legislative session to set up a tax package,' the governor wrote in a veto message for House Bill 14.
'Even more troubling is the fact that what ultimately emerged lacked both strategic coherence and fiscal credibility,' she added.
Lujan Grisham has signed more than 150 of the 195 bills the Legislature passed in the session that ended last month. The flurry of vetos Friday brings her total number of vetoes to 18 bills, according to the secretary of state's website.
A couple of dozen bills the governor hadn't signed or vetoed by Friday evening likely would be 'pocket vetoed,' or vetoed by default due to lack of action.
One significant bill the governor had not signed as of 5 p.m. Friday would have authorized the New Mexico Public Education Department to enter into compacts with tribes to create language and culture-based institutions.
Promoted by tribal leaders and Indigenous advocates, Senate Bill 13 would have made the proposed state-tribal compact schools eligible for state public school funding.
'Last-minute' tax package
Heavily debated by lawmakers, HB 14 would have created an Earned Income Tax Credit, replacing the state's current Working Families Tax Credit with higher income thresholds for single workers and families. It also would have provided tax credits for foster parents and a gross receipts tax deduction for health care providers, and would have increased the state's liquor excise tax by 20%.
The tax package was moved to the governor's desk near the end of the 60-day session.
'New Mexicans deserve thoughtful, forward-looking policy — not last-minute dealmaking that delays relief, ignores economic opportunity, and undermines fiscal responsibility,' Lujan Grisham wrote in her veto message.
After 36 hours of disagreement after the tax measure passed both chambers, the House and Senate finally agreed to nix a proposed 0.28% 'oil and gas equalization surtax' to pay for the tax credit as well as some additional tax credits proposed by the Senate. Instead, they opted for the liquor tax hike.
The chair of the House Taxation and Revenue Committee, Rep. Derrick Lente, D-Sandia Pueblo, disputed the governor's rationale for the veto.
'I stand 100% behind the package. ... In regards to the comments made by the governor that it was not 'thoughtful, forward-looking policy,' I don't think that's correct,' Lente said, noting he strongly believed in a part of the tax package that would have eliminated the personal income tax for workers earning minimum wage and some families.
'Those initiatives were months in the making,' Lente said.
Lujan Grisham highlighted in her blistering veto message how many of the changes outlined the tax package would not have taken effect until 2027. She wrote she believed this was because there was 'no plan and no preparation' for how to pay for the tax relief.
The Legislature delayed tax relief for working families 'despite the state sitting on more than $3 billion in one-time revenues and over 30% in reserves,' she wrote. 'This is not prudence — it is paralysis.'
Sen. George Muñoz, D-Gallup, chair of the Senate Finance Committee, said he agreed with the governor's decision to veto the measure.
'The package bound future legislators, which you cannot do,' Muñoz said. 'You can't say, 'I'll give you tax relief based on future income,' because we don't know what that is.'
Other prominent members of the Legislature expressed disappointment, however.
'I am disappointed with the veto because tax packages are hard to craft and necessarily involve lots of compromise,' Senate Majority Leader Peter Wirth, D-Santa Fe, said in a statement. 'The one positive is the bill had an effective date of 2027, meaning we can use it as a framework for legislation in the 2026 session, assuming we can find the money to pay for it.'
Lente said initiatives in the tax bill 'were to do exactly the thing she said they don't do in her message.'
No 'lowrider capital' plate
Sen. Leo Jaramillo, D-Española, expressed deep disappointment in the governor's veto Friday of Senate Bill 327, which would have created a new 'lowrider capital' license plate. The legislation he co-sponsored amounted to much more than a 'license plate bill' — as the governor called it — in his community, one long known for its vibrant lowrider scene, he said.
'Mostly, when we tell people we are from Española, people find it appropriate to ask us if we want to hear an Española joke, and we don't,' Jaramillo said. 'This bill would have made sure that it shined a light on the [Española] Valley, and it would have given us a win that we need, that we deserve, and it would have been amazing to see that license plate.'
In her veto message for SB 327, the governor criticized the Legislature for that bill and another designating a state bread, while public safety bills she backed didn't reach her desk.
'Yet, in the final hours of the session, and in the wake of a mass shooting in Las Cruces that went unacknowledged by House leadership, the House found time to debate the merits of a state bread,' Lujan Grisham wrote.
The message also cites a failed bill that would have prohibited synthetic cannabinoids and semisynthetic cannabinoids by banning possession, marketing and sales of delta-8, delta-10 and THC-O acetate in New Mexico.
'And the Legislature found time to pass not one, not two, but three separate license plate bills, despite already having 40 specialty plates on the books,' the governor wrote.
Visibly frustrated by what she called a lack of public safety legislation that passed, Lujan Grisham warned lawmakers in a news conference last month to expect a special session to complete the task. She has not yet set a date for such a session.
Camille Ward, a spokesperson for House Democrats, pointed Friday to an omnibus public safety package the Legislature pushed through this session, which reforms criminal competency laws and cracks down on shooting threats, fentanyl trafficking and drunken driving, as well as a measure expanding the list of offenses that constitute racketeering and another that creates a 'Turquoise Alert' for when Native Americans go missing in the state.
Proposed new park axed
Lujan Grisham also vetoed a bill that would have created a new state park near Las Cruces — Slot Canyons Riverlands State Park — arguing existing parks are understaffed and 'undermaintained.' An additional state park would further strain resources, she contended.
The Nuestra Tierra Conservation Project, a Las Cruces-based nonprofit that advocates for environmental conservation and 'social equity,' lamented the move from the governor. About 35 state parks are scattered across New Mexico.
'At a time when our public lands are under attack by the federal government, the state should be doing more, not less, to increase access to the outdoors,' Àngel Peña, executive director of Nuestra Tierra, said in a statement.
'State parks and public lands offer New Mexico families the opportunity to enjoy outdoor spaces at low or no cost, and it's a shame the governor chose to block this new park that our community advocated so hard for,' the statement continued.