Gov. Michelle Lujan Grisham made massive cuts to the Legislature’s tax relief bill last year, shrinking it by more than 75%. Lawmakers this time around are proposing an even more conservative approach than she is.
After the state Legislature passed an over $1 billion tax package last year, Gov. Michelle Lujan Grisham used line item vetos to cut it back to a mere $247 million.
She wrote to lawmakers at the time that she was concerned the amount they approved was unsustainable and could hurt the state’s ability to properly fund crucial services in the future.
This year, the Legislative Finance Committee (LFC) has proposed setting aside just $200 million for tax changes. That is less than 20% of last year’s proposal, even though state income should be even higher.
Chair of the House Appropriations and Finance Committee Rep. Nathan Small (D-Doña Ana) said at a news conference Friday that the amount is responsive to what lawmakers heard from Lujan Grisham.
“The governor’s veto of the tax package last year was because of the recurring cost of the billion dollars,” he said, emphasizing that it is not just one-time spending. “The 200 million dollar number is a recognition that that is a recurring number. That’s something that hasn’t always been done.”
The LFC proposal is so conservative that the governor herself has proposed spending more than double the amount. The Executive Budget Recommendation sets aside $500 million for the tax package.
Secretary of Finance and Administration Wayne Propst told lawmakers on the House’s finance committee Monday that he is confident the two branches can come to a “good agreement” on how much to spend on tax breaks.
“We certainly aren’t drawing a line in the sand on $500 million,” he told the panel. “But we thought, based on some of the discussions we had during the interim, that that was a reasonable place to start.”
The 30-day legislative session begins next week on Tuesday, Jan. 16.
