SANTA FE, N.M. — According to a bill approved by the state Legislature, New Mexico will provide new payments totaling $500 for individual adults and $1,000 for households to offset high fuel prices and raging inflation.
Senate Republicans voted 35-1 to send the Democratic-sponsored bill to Gov. Michelle Lujan Grisham, who supports the initiative. The House voted 51-13, with Democrats and some Republicans voting in favour.
In total, the aid package would provide nearly $700 million to adult residents of all income levels, including the elderly who have little or no income and do not normally file taxes, as well as undocumented immigrants.
Over a dozen states are considering or implementing payouts to the public in response to soaring inflation and budget surpluses, along with some tax cuts. Gas prices in the United States have soared to record highs as a result of the Ukraine conflict and a ban on Russian oil imports.
Fuel prices are wreaking havoc on household finances at the same time that New Mexico’s state government is enjoying a financial windfall as a result of the Permian Basin’s record-breaking oil production. New Mexico surpassed North Dakota last year to become the nation’s second largest oil producer, trailing only Texas.
Supporters of the proposed payments, including the governor, argue that it is the state’s responsibility to assist those experiencing financial hardship as a result of inflation.
Certain Republican legislators warned that rebates would likely exacerbate inflation. They also questioned the timing in light of Lujan Grisham’s re-election bid in November.
Randal Crowder, a Republican state representative from Clovis, said the payments could backfire in the long run.
“It will be a welcome boost, but it will contribute to inflation,” Crowder said. “It’s going to increase the pressure and pain on people who aren’t equipped to deal with it. We’re refuelling a roaring fire.”
Rep. Christine Chandler, a Democrat from Los Alamos and a cosponsor of the rebate plan, says state payments would be staggered over several months to avoid predatory price increases.
Tax rebates do not always sway voters, Democratic House Speaker Brian Egolf stated.
“I truly believe that voters will not decide whether or not to elect a governor based on a tax rebate,” said Egolf, who is not seeking reelection. “Given the economic circumstances, we’re going to make the best decision for the state’s citizens.”
D. Wanda Johnson, a Democratic state representative from Rehoboth and a Navajo tribal member, endorsed the inflation payments by citing the vast driving distances between communities on the Navajo Nation in northwestern New Mexico — and the cost of abrupt changes in fuel prices.
“Those are quite a few miles,” she observed. “The cost begins to mount.”
The majority of New Mexico taxpayers were already scheduled to receive a separate $250 state rebate in July, with the exception of high-income taxpayers. In February, legislators approved annual per-child tax credits ranging from $25 to $175, depending on household income.
The new initiative allocates $20 million in payments on a first-come, first-served basis to individuals who do not file tax returns due to insufficient income. This provision is primarily intended for the elderly, but is available to all adults who can demonstrate residency.
State tax officials noted that the proposed tax rebates would be available not only to citizens of the United States, but also to undocumented immigrants who file their taxes using an IRS-issued substitute tax identification number.
Additionally, legislators reintroduced a vetoed bill that included $50 million in pet projects ranging from food banks to uranium mine cleanup and domestic violence shelters. Lujan Grisham has called for increased transparency in legislators’ spending requests.