I was not sure we were going to be getting an Omnibus Tax bill, but here it is. As always thanks to our friends at NM Voices for Children for their analysis. Paige returned from maternity leave to provide us with this analysis.

I will be speaking for this at HTR this morning. 

Dick Mason

----- Forwarded Message -----
From: Paige Knight <pknight@nmvoices.org>
To: Paige Knight <pknight@nmvoices.org>
Sent: Thursday, March 13, 2025 at 11:47:38 PM MDT
Subject: NMFP - Tax Omnibus Bill

Hello Fairness Project!

We have our long awaited tax omnibus bill, HTRC committee substitute for HB 14!! It will be heard tomorrow morning (Friday, 3/14) in HTRC at 9:00am.

It is a much simpler bill than the bills we've seen the past few years, and does three things:
  1. First and foremost, it accomplishes what the original HB 14 did (which is great): 
    • It largely decouples us from the federal EITC by creating our own state EITC (currently we have the Working Families Tax Credit which simply amounts to 25% of the federal EITC). The credit amount and income limits proposed in this bill are more generous than the federal version, effectively boosting the current credit amount to 30% of the federal EITC (it just would no longer be tied to it) and reaching 75,000 more New Mexicans. Not only does this mean more money back into the pockets of hard-working families, but this bill will help protect families if there are any federal tax cuts to the EITC. This proposal will also help soften the cliff effect by increasing the benefit for workers without children and nearly doubling the income eligibility threshold. The EITC overall is an extremely important and effective anti-poverty tool with a host of well-researched benefits such as improved educational and health outcomes.
    • Want to learn more? Check out our report we released in December on tax credits and poverty!
  2. It creates a new Oil and Gas Equalization Surtax, whereas if the WTI price is greater than or equal to $55/barrel, the surtax is 0.28% of the taxable value of the oil produced. 
  3. Slightly reduces the natural gas tax from 4% to 3.9%.
    • These last two provisions appear modeled after HB 548, but are a little different in the tax rates imposed. The FIR is not out yet, so I'm not sure the total fiscal impact, but the revenue raised from the oil surtax would offset the cost of the EITC, I imagine, to reach the legislature's goal of a revenue neutral tax package. 
If you're able, please speak in favor of the tax omnibus package! From HTRC, it will go to the House floor before heading to Senate Tax, where they will add in their tax priorities. Hopefully, the oil and gas surtax will raise enough revenue to allow for additional capacity on the Senate side to add in the Child Tax Credit increase for young children (SB 294). 

You can join HTRC in room 317, or via Zoom at https://us02web.zoom.us/j/84092015982 

Any questions or concerns, please let me know! Thanks so much!

--
Paige Knight, MPP (she/her)
Deputy Policy Director
New Mexico Voices for Children
625 Silver Ave. SW, Suite 195
Albuquerque, NM 87102
C: 952-465-1740