Governor Scales Back Tax Reform Bill
Governor Michelle Lujan Grisham has signed part of the omnibus tax bill,HB 547 giving $500 and $1000 rebates to New Mexicans, but vetoed some other major portions of the legislation.
Friday at noon was the deadline for the Governor to attach her signature to bills that would otherwise be pocket vetoed.
The rebates were approved by Lujan Grisham along with an expanded child tax credit, as well as expansions of the gross receipts tax deduction for health care practitioners and the film tax credit program.
But other portions of the tax bill including the expanded liquor tax, the personal income tax deduction and the electric vehicles tax credit were victims of the Governor’s veto pen.
Lujan Grisham says the $1.2 billion in lost revenue from the tax bill on top of the $500 million in tax reductions already approved would have been too much and too deep of a reduction in case the state’s economy has a downturn.
“There will be a cooling of the economy and I don’t want to even say that out loud,” she said. “Maybe I’m wrong. If that’s the thing we will have cake, ice cream, champagne, the works, if we never have a cooling economy and it just keeps on growing, that is easy. What’s not so easy is when that doesn’t happen and then it’s really hard.”
Lawmakers from sides of the aisle say they are disappointed that a lot of the tax bill was vetoed.
Senate Minority Floor Leader Gregory Baca says it was a mixed bag as he was happy to see some parts approved while not happy about what didn’t make it like the personal income tax reduction.
“I share the sentiment of most in this, some of it good, some of it bad,” he said. “I would like to see generally more tax relief going to taxpayers in state than what we’re doing right now though.”
The Governor also signed the budget into law on Friday.
She says the two major line item vetoes in the budget were the contingency fund of $30 million for Family Leave Act since it wasn’t approved by the legislature and funding for the UNM Bioscience Authority which she says needs more work before funding can be approved.