Extracted from Pete Dinelli’s Blog of April 10, 2023
The Governor signed a raft of bills by the deadline date of April 7th, 2023. The governor signed the enacted $9.6 billion budget plan for the fiscal year that begins on June1. The budget will boost state spending to record-high levels for the third consecutive year amid a revenue windfall. The Governor did line item veto $21 million from the spending plan before signing it.
The signed budget bill includes $100 million to bolster a law enforcement officer recruitment fund, $100 million to set up two new funds for conservation programs and upwards of $90 million to increase reimbursement rates for Medicaid providers. The budget also provides funding to give 6% pay raises to state employees and teachers.
The governor also signed bills intended to expand access to health care. The measures include emergency legislation to revise New Mexico’s medical malpractice law to ensure independent outpatient clinics can obtain the insurance they need to keep operating next year. Also approved were bills intended to help rural hospitals and address high prescription drug costs.
She also vetoed 36 major pieces of legislation, including most of the tax reform package. She struck from the tax reform package a phased-in reduction of the gross receipts tax New Mexico consumers pay on goods and services, a 20% alcohol tax increase, an electric vehicle tax credit and changes to the state’s personal income tax system aimed at benefiting low-income residents and vetoing 20 other major provisions from the tax bill. She described the bill as “bloated and fiscally unstable.”
The Governor left intact the $500 tax rebate for individuals and the $1,000 rebated for married couples filing jointly, expanded child tax credit of up to $600 per child, and changes to the state’s film incentive program. This tax package equals about $1 billion. Almost $700 million of that amount is attributed to the rebates.
Governor Lujan Grisham said she preferred more gradual changes to the tax code and said, “I just want us to be more pragmatic. … I didn’t think it was prudent to do it all at once.” She did say the tax bill contained many “laudable tax reform measures,” but said she had “grave concerns about its future sustainability”. The Governor said, “Given the unpredictable nature of the economy and our state’s reliance on oil and gas revenues, I am not confident this package is fiscally responsible.”
Among the 35 vetoes included vetoing the bipartisan proposals to revise high school graduation requirements, establishing a civil rights office under the state Attorney General and overhauling New Mexico’s Game Commission. She also vetoed bills that would have raised judges’ pay, changed the system for probation and parole violations, and finally exclude drug possession from sentencing enhancements for habitual offenders.