Latest news with #HouseTaxationandRevenueCommittee
Yahoo
15-03-2025
- Business
- Yahoo
House committee ties tax credit for working class to oil tax hike
A House committee has advanced a bill to cut or even eliminate state income taxes for many working New Mexicans — but also added a tax hike for oil producers, stirring opposition from Republicans and the industry. To cap a day of setbacks for oil and gas, another House committee voted later Friday to advance a measure to increase the royalty rate, or a charge oil producers pay based on the value of oil or gas they extract. House Bill 14, which passed the House Taxation and Revenue Committee on a 7-5 vote Friday morning and now heads to the full House, would replace the state's Working Families Tax Credit with an Earned Income Tax Credit, eliminating state income tax liability for single people making less than $25,000 a year and childless married couples making less than $30,000 a year. The thresholds go up with the number of children; married couples with three children would need to make more than $70,000 a year to have any tax liability. The amendment would add an extra 0.28% "oil and gas equalization surtax" when crude prices are $55 a barrel or more, which when added to the existing tax effectively raises the rate to 3.4%, said Rep. Derrick Lente, D-Sandia Pueblo, who chairs the House Taxation and Revenue Committee. This would bring in an extra $130 million a year, he told the committee. It would also cut the rate on natural gas producers by one-tenth of 1% to 3.9%, which would reduce the amount collected from them by $11 million a year. "For several years now, we have cut taxes for working people and made our tax code more reflective of our state's values,' Lente said in a statement Friday. 'Today, we are doubling down on our investments in workers and families, while making sure that the industry profiting from the extraction of our state's natural resources pays its fair share.' The amendment had its origins in House Bill 548, introduced by Rep. Nathan Small D-Las Cruces, chair of the House Appropriations and Finance Committee. As originally written, the measure would have boosted the tax on oil to 4% to make it the same as natural gas. Lente said the amendment was a response to concerns with the original proposal. 'The fact of the matter is, he listens," Lente said. "We listen. We listened.' Supporters of HB 14 said it makes sense to use revenue from a wealthy industry to cut taxes for less-wealthy New Mexicans. Camilla Feibelman, director of the Sierra Club's Rio Grande chapter, said natural resources such as oil and gas belong to the public and are mostly drilled on public lands. "We stand in strong support of ensuring that those natural resources support our families first and foremost," she said. Democrats framed the tax credit as a way to help during a time of economic uncertainty amid rising prices rise and increasing odds of a recession. 'We don't know how unaffordable life will become over the next few years, so New Mexico is stepping up to ensure that you can keep more of your hard-earned money so that you can afford staples from food, medicine, health care ... energy, whatever the case may be, said House Speaker Javier Martínez, D-Albuquerque. Opponents mostly didn't object to the tax credit but to the tax increase on oil producers, which they worried would be passed on to consumers and hurt producers or even drive some out of the state. "We say we love this industry, but at this point, I think there's been over 23 bills that have negatively impacted this industry that have come through this body" this session, said Rep. Jonathan Henry, R-Artesia. 'The more that break-even price goes up, the quicker the industry shuts down,' Henry said. 'When that industry shuts down, what happens to our budget in New Mexico?' Some questioned the wisdom of tying 'an ongoing tax credit to volatile oil and gas revenues,' as Alison Riley, public policy director of the New Mexico Chamber of Commerce, put it. 'The chamber is proud to support working families, but with $3 billion in new revenue, there is plenty to fund priority programs ... without a tax increase,' said Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce. In a statement after the vote, the New Mexico Oil and Gas Association said HB 14 was "originally a good bill" that was "hijacked." "Instead of raising taxes, the Legislature should prioritize policies that drive down consumer costs, foster economic growth and diversification, and protect the energy workers that are the backbone of many communities across our state," said Missi Currier, the organization's president and CEO. Senate Bill 23, which the House Appropriations and Finance Committee voted 9-8 to advance Friday evening, increases the maximum royalty rate from 20% of the value of the oil or natural gas to 25% in certain areas. That hike, according to a Legislative Finance Committee analysis, could generate from $50 million to $75 million in additional revenue to the state's land grant permanent fund. A separate State Land Office analysis estimated it could eventually boost additional annual revenues by $50 million to as much as $84 million. State Land Office Deputy Commissioner of Operations Sunalei Stewart said 25% royalty rates are already relatively standard for oil production on private lands, including in New Mexico, and that the agency has a legal obligation to charge oil companies the market rate for public resources. 'This is not anti-oil and gas. This industry contributes a tremendous amount, and we appreciate that — the school kids benefit,' he told lawmakers. 'But it is our job to ensure that we're getting that market rate.' However, industry advocates and Republican lawmakers worried the bill would contribute to driving oil and gas companies away. 'It almost seems punitive to me,' said Rep. Harlan Vincent, R-Glencoe. '... We're not treating oil and gas like we should be treating oil and gas.' Rep. Matthew McQueen, D-Galisteo, said the state's exceptional land parcels for oil production would help keep companies here, noting that even if their expenses were a little higher, their profits would be high too. 'We're talking about the best of the best, which are not only the best in the Permian [Basin], but potentially some of the best in the world,' he said. '... It has never once been suggested that these parcels would not find willing bidders.' New Mexican reporter Esteban Candelaria contributed.
Yahoo
15-03-2025
- Business
- Yahoo
Dems propose eliminating personal income taxes for certain working families
Mar. 14—SANTA FE — Democrats are proposing eliminating all personal income taxes for working-class households making $70,000 or less a year, a cost that would be offset by a new oil surtax. The earned income tax credit proposal unveiled this week passed the House Taxation and Revenue Committee 7-5 along party lines Friday. Republicans dubbed it another effort to harm the oil and gas industry. The proposal comes as New Mexico has seen a booming budget and surplus. But it is uncertain if actions by the Trump administration will result in the loss of federal dollars the state is heavily reliant upon. The tax package also takes into consideration the increasing likelihood of a recession and high inflation rates, according to bill sponsors. "We don't know how unaffordable life will become over the next few years," said House Speaker Javier Martínez, D-Albuquerque, a sponsor of the tax package. House Bill 14 would expand the state's working families tax credit currently available for low- and middle-income households. An additional 100,000 New Mexicans would get the tax break if the Legislature also approves a new 0.28% severance and sale surtax on oil when prices per barrel are at or above $55, which they are today. Tax credits would be available for workers making up to $82,400 annually, though the credits may not fully offset personal income taxes in all situations. The state would lose out in fiscal year 2026 on about $72 million from the loss of personal income tax revenue, but that would be compensated with the roughly $130 million generated from the new oil surtax. "Revenues raised by these provisions are used to help New Mexicans in the middle and working classes," said bill sponsor Rep. Derrick Lente, D-Sandia Pueblo. The tax package would also slightly adjust emergency school tax rates — money that goes to the state's general fund. Gas tax rates would decrease from 4% to 3.9%, resulting in an $11.4 million loss of revenue. Oil tax rates would remain at 3.15%. Current tax incentives offered for wells producing small amounts, known as stripper wells, would remain in place. "New Mexico has an absolute right to negotiate what is equal and fair for our citizens and provide those opportunities," Lente said. 'A much more modest approach' The tax package is a combination of 16 previously tabled bills, Lente explained. He described it as a calculated approach that doesn't go all-out on spending. "We've taken a much more modest approach," he said. In a round-about way, the package eliminates personal income taxes for many working families. That's because it would offer tax credits in increasing amounts depending on how much taxpayers make, their marital status and if they have children. It would also make New Mexico's working-class tax incentives more independent of the federal government. Eligibility for the state's working families tax credit is currently based on the federal earned income tax credit, but HB14 would allow the New Mexico Taxation and Revenue Department to directly adjust income thresholds based on inflation. "The bill decouples New Mexico from the federal earned income tax credit, allowing us to tailor this program for the benefit of New Mexicans as we study the impacts of this program over the next several years," Lente said. Taxing NM's big revenue source Rep. Rod Montoya, R-Farmington, said he's always loved the working-class income tax credit. But "this year of all years does not justify raising taxes on the industry that pays for approximately half of our budget," he said. Surging oil production in recent years has resulted in hundreds of millions of dollars more for the state, accounting for upward of a third of the currently proposed $10.8 billion budget. But decreasing oil prices have raised red flags for Republicans, prompting Rep. Jonathan Allen Henry, R-Artesia, to call the state of the industry unstable. The price of WTI (West Texas Intermediate) crude oil was $67 a barrel Friday, a drop of approximately $9 since the start of the session. Henry said it's a sign to be cautious. Oil and gas producers speaking against the bill during public comment, including the Independent Petroleum Association of New Mexico and the New Mexico Oil and Gas Association, voiced similar sentiments. Bridget Dixson, president and CEO of the Santa Fe Chamber of Commerce, added that the tax package only worsens the state's dependence on the volatile oil and gas industry, which Lente rebutted. "Our oil and gas industry is dependent on global dynamics, and not necessarily a small increase in this equalization," he said. "So when we talk about tariffs being waged and a federal administration waging certain wars with certain individuals, this is far more of a reach than a modest attempt to equalize New Mexico's tax rates."
Yahoo
15-03-2025
- Business
- Yahoo
House committee ties tax credit for working class to oil tax hike
A House committee has advanced a bill to cut or even eliminate state income taxes for many working New Mexicans — but also added a tax hike for oil producers, stirring opposition from Republicans and the industry. To cap a day of setbacks for oil and gas, another House committee voted later Friday to advance a measure to increase the royalty rate, or a charge oil producers pay based on the value of oil or gas they extract. House Bill 14, which passed the House Taxation and Revenue Committee on a 7-5 vote Friday morning and now heads to the full House, would replace the state's Working Families Tax Credit with an Earned Income Tax Credit, eliminating state income tax liability for single people making less than $25,000 a year and childless married couples making less than $30,000 a year. The thresholds go up with the number of children; married couples with three children would need to make more than $70,000 a year to have any tax liability. The amendment would add an extra 0.28% "oil and gas equalization surtax" when crude prices are $55 a barrel or more, which when added to the existing tax effectively raises the rate to 3.4%, said Rep. Derrick Lente, D-Sandia Pueblo, who chairs the House Taxation and Revenue Committee. This would bring in an extra $130 million a year, he told the committee. It would also cut the rate on natural gas producers by one-tenth of 1% to 3.9%, which would reduce the amount collected from them by $11 million a year. "For several years now, we have cut taxes for working people and made our tax code more reflective of our state's values,' Lente said in a statement Friday. 'Today, we are doubling down on our investments in workers and families, while making sure that the industry profiting from the extraction of our state's natural resources pays its fair share.' The amendment had its origins in House Bill 548, introduced by Rep. Nathan Small D-Las Cruces, chair of the House Appropriations and Finance Committee. As originally written, the measure would have boosted the tax on oil to 4% to make it the same as natural gas. Lente said the amendment was a response to concerns with the original proposal. 'The fact of the matter is, he listens," Lente said. "We listen. We listened.' Supporters of HB 14 said it makes sense to use revenue from a wealthy industry to cut taxes for less-wealthy New Mexicans. Camilla Feibelman, director of the Sierra Club's Rio Grande chapter, said natural resources such as oil and gas belong to the public and are mostly drilled on public lands. "We stand in strong support of ensuring that those natural resources support our families first and foremost," she said. Democrats framed the tax credit as a way to help during a time of economic uncertainty amid rising prices rise and increasing odds of a recession. 'We don't know how unaffordable life will become over the next few years, so New Mexico is stepping up to ensure that you can keep more of your hard-earned money so that you can afford staples from food, medicine, health care ... energy, whatever the case may be, said House Speaker Javier Martínez, D-Albuquerque. Opponents mostly didn't object to the tax credit but to the tax increase on oil producers, which they worried would be passed on to consumers and hurt producers or even drive some out of the state. "We say we love this industry, but at this point, I think there's been over 23 bills that have negatively impacted this industry that have come through this body" this session, said Rep. Jonathan Henry, R-Artesia. 'The more that break-even price goes up, the quicker the industry shuts down,' Henry said. 'When that industry shuts down, what happens to our budget in New Mexico?' Some questioned the wisdom of tying 'an ongoing tax credit to volatile oil and gas revenues,' as Alison Riley, public policy director of the New Mexico Chamber of Commerce, put it. 'The chamber is proud to support working families, but with $3 billion in new revenue, there is plenty to fund priority programs ... without a tax increase,' said Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce. In a statement after the vote, the New Mexico Oil and Gas Association said HB 14 was "originally a good bill" that was "hijacked." "Instead of raising taxes, the Legislature should prioritize policies that drive down consumer costs, foster economic growth and diversification, and protect the energy workers that are the backbone of many communities across our state," said Missi Currier, the organization's president and CEO. Senate Bill 23, which the House Appropriations and Finance Committee voted 9-8 to advance Friday evening, increases the maximum royalty rate from 20% of the value of the oil or natural gas to 25% in certain areas. That hike, according to a Legislative Finance Committee analysis, could generate from $50 million to $75 million in additional revenue to the state's land grant permanent fund. A separate State Land Office analysis estimated it could eventually boost additional annual revenues by $50 million to as much as $84 million. State Land Office Deputy Commissioner of Operations Sunalei Stewart said 25% royalty rates are already relatively standard for oil production on private lands, including in New Mexico, and that the agency has a legal obligation to charge oil companies the market rate for public resources. 'This is not anti-oil and gas. This industry contributes a tremendous amount, and we appreciate that — the school kids benefit,' he told lawmakers. 'But it is our job to ensure that we're getting that market rate.' However, industry advocates and Republican lawmakers worried the bill would contribute to driving oil and gas companies away. 'It almost seems punitive to me,' said Rep. Harlan Vincent, R-Glencoe. '... We're not treating oil and gas like we should be treating oil and gas.' Rep. Matthew McQueen, D-Galisteo, said the state's exceptional land parcels for oil production would help keep companies here, noting that even if their expenses were a little higher, their profits would be high too. 'We're talking about the best of the best, which are not only the best in the Permian [Basin], but potentially some of the best in the world,' he said. '... It has never once been suggested that these parcels would not find willing bidders.' New Mexican reporter Esteban Candelaria contributed.
Yahoo
19-02-2025
- Politics
- Yahoo
Proposed alcohol tax passes first committee
A new bill proposes a new tax on alcohol retail sales to benefit treatment programs. Lawmakers today introduced a proposal to raise New Mexico's tax on alcohol for the first time in 30 years and re-direct revenue toward treatment and programs. The House Health and Human Services Committee voted 6-4 to advance House Bill 417, Liquor Tax Changes and Programs. It now heads to the House Taxation and Revenue Committee. The bill specifically creates a new 6% sales tax — also called a surtax — on alcohol sold in retail establishments, and eliminates distribution of revenue from the existing alcohol excise tax to the general fund, which currently receives a portion of that money. Instead, the bill creates a new Local Alcohol Harms Alleviation Fund to allocate funding to counties and 'target the communities most in need by prioritizing counties with the highest death rates from alcohol use,' a news release on Wednesday said. Counties that receive the funding 'could use these funds for grants to raise awareness of the harms and risks associated with substance misuse, promote prevention, get people into treatment, and address issues like impaired driving.' HB417 also creates a new Tribal Alcohol Harms Alleviation Fund and Program to provide grants to the state's tribes, nations and pueblos, as well as entities that serve Native Americans. Lawmakers say the bill arrives after months of discussion. The proposal also follows several years of failed efforts to raise the tax on alcohol, and increasing scrutiny of New Mexico's top ranking for alcohol-related deaths. Representatives Micaela Lara Cadena (D-Mesilla), Joanne Ferrary (D-Las Cruces) and Cristina Parajón (D-Abuquerque) and Senators Shannon Pinto (D-Tohatchi) and Antionette Sedillo-Lopez (D-Albuquerque) co-sponsored the bill. 'Far too many of us have lost a loved one to alcohol,' Ferrary said in a statement. 'With this bill, we are taking an important step that is many years in the making to help improve access to treatment, reduce excessive drinking, and hopefully begin saving lives.' A fiscal analysis of the bill estimated that the proposed surtax imposition will generate $45.7 million in FY26, and that HB417 would reduce recurring general fund revenue by $24.7 million by redirecting revenue to the alcohol prevention and treatment programs.
Yahoo
18-02-2025
- Politics
- Yahoo
Major tax breaks for low-income families in New Mexico could be coming soon
NEW MEXICO (KRQE) – Low-income families in the state could see a huge tax break next year. New Mexico legislators are considering a bill that would eliminate the state income tax for those making less than $55,000 a year. The bill is part of an effort to support New Mexicans while the cost of living rises.'There'll be now about a little over 300,000 workers in New Mexico that will have their state personal income tax liability completely extinguished,' said Rep. Derrick Lente (D-Sandia Pueblo). Story continues below Crime: Trial to begin for suspect in shooting death of 11-year-old outside Isotopes Park Jobs: Santa Fe announces living wage increase Don't Miss: ABQ arrest leads to discovery of 4 firearms, about $1 million in drugs Should the Earned Income Tax Credit Bill pass, it would increase refundable credits and expand who is eligible for tax breaks, specifically for New Mexicans making minimum wage up to $25 per hour. Rep. Lente, Chair of the House Taxation and Revenue Committee, said this bill could create a meaningful impact during a time when the cost of living is rising. 'We are doing this in a way that's responsible, it's not breaking the bank, and I think that if times ever turn financially for New Mexico, this would be one of those things that would not have to be cut,' said Rep. Lente. The proposed tax credit will instead be paid by the state. The cost is currently estimated to be around $70 million annually. After the bill was presented, there was deliberation on possibly expanding the bill to include middle-wage earners in the state. But Rep. Lente said it's a balancing act. 'I think it's a matter of how much do we want to expand it before it gets too expensive to want to be able to implement it year after year and feel comfortable with it?' said Rep. Lente. While legislators and the public expressed support for the bill it's still undergoing changes. But the bill could be added to a larger tax package later. 'A common practice in our committee is that anything that has a fiscal impact to the general fund will have to be tabled and retained in our committee for the potential inclusion into a larger tax omnibus bill,' said Rep. Lente. The tax package is set to be assembled near the end of this legislative session. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
