Bill to give New Mexico taxpayers $750 rebate sails through Senate committee
Feb. 2—Some 875,000 New Mexicans would get a cut of the state's record revenues under a bill that received unanimous approval during its first legislative committee hearing Thursday.
Senate Bill 10, a priority of Gov. Michelle Lujan Grisham, would appropriate $1 billion to provide a one-time tax rebate of $750 for single filers and $1,500 for joint filers.
"Taxpayers' budgets are stretched thin due to inflation that includes a higher cost of food, heating, gas and other basic necessities," one of the sponsors, Sen. Benny Shendo Jr., D-Jemez Pueblo, told the Senate Tax, Business and Transportation Committee, which he chairs.
"This relief will help countless New Mexico families make ends meet," he said.
The bill also appropriates $30 million to the Human Services Department to make payments to New Mexico residents who don't file a tax return.
"Many New Mexicans are not required to file a personal income tax return due to low income levels, and this appropriation will ensure that they are able to share in this relief," Shendo said.
Last year, the state issued tax rebates to New Mexicans who met certain income thresholds. The latest round of rebates would be paid to all residents who filed state tax returns for tax year 2021.
"I have heard from a large number of New Mexicans who have reached out to me in need of financial assistance," said Sen. Leo Jaramillo, D-Española. "This income tax rebate is critical to families who are struggling to make ends meet."
Paige Knight, senior research and policy analyst for New Mexico Voices for Children, spoke in favor of the bill but recommended "progressively structured" rebates so "the families who are most in need receive a larger rebate since rising food and energy prices hit lower income households the hardest."
Asked to explain why the rebates would be issued to all New Mexicans, Taxation and Revenue Secretary Stephanie Schardin Clarke said New Mexico's income levels are fairly low compared with other states.
"If we create an income cutoff, we actually don't reduce the fiscal impact of the rebate program that much because [there aren't that] many higher-income filers in New Mexico," she said.
Schardin Clarke also said the administration wants the rebates to go out to taxpayers right away and that changing the eligibility criteria would create a delay.
"There's an administrative part to getting this money delivered to taxpayers very quickly," she said.
Shendo previously said the payments would be distributed this summer if the Legislature approves the measure.
Sen. Craig Brandt, R-Rio Rancho, said some taxpayers, including himself, still haven't received the rebates from last year.
"What are they going to do about the fact that they never received one?" he asked.
"By and large, rebates are out the door, and they have been for several months," Schardin Clarke responded. "If anyone hasn't received one yet, it's probably a signal that their return is being held in error."
Schardin Clarke said eligible taxpayers who haven't received their rebate from last year should contact her department.
The bill heads next to the Senate Finance Committee.
Before the 10-0 vote, Senate Majority Leader Peter Wirth, D-Santa Fe, questioned how the $1 billion for the one-time rebates would impact the long-term tax reform initiatives the Legislature is considering, such as cutting the gross receipts tax.
"I'm not sold on the dollar amount yet," he said. "It's going to depend on how this fits into the overall picture of what's available for nonrecurring [initiatives], so I may be looking at an amount that's lower than this."
Follow Daniel J. Chacón on Twitter @danieljchacon.