A closer look: Where is the tax rebate money coming from?
ALBUQUERQUE, N.M. – Following a 12-hour session at the Roundhouse Tuesday, lawmakers passed a tax rebate bill. The idea is to help New Mexicans navigate inflation and rising gas costs.
Once signed by Gov. Michelle Lujan Grisham, people who file their taxes individually would get $500 total – in two payments. It goes up to a $1,000 total for couples and heads of household filers. The first payment would come in June and the second in August.
According to the Legislative Finance Committee, there are 490,000 New Mexicans looking to get a total of $500 in tax rebates following the passage of House Bill 2.
432,000 New Mexicans who file their taxes jointly can expect $1,000 total. Another 135,000 New Mexicans who don’t file taxes will also be able to apply for a rebate.
Altogether, the state expects to pay out just under $700 million to make these rebates happen. So where is that money coming from?
Overall, the money is coming from New Mexico’s oil fields. The Legislative Finance Committee says the state’s oil and gas industry is doing well.
“I think oil and gas prices have been strong. We’re tracking about $300 million in FY22 and a similar amount in 23,” said state Rep. Patricia Lundstrom, D-Gallup.
That’s a projected surplus of $500 million to $700 million dollars between this fiscal year and the next.
“Our state’s productive budget surplus allows us to deliver much-needed financial relief to our citizens as they face the ripple effects of these costs,” said state Rep. Christine Chandler, D-Los Alamos.
That money would normally go into the state’s general fund, but with House Bill 2 it will instead be redirected to eligible New Mexicans.
“I think this is a good idea and we can afford this, because we have the money available, and it’s much better if it’s out working for folks as opposed to being in a savings account,” said Lundstrom.