As Legislators return home after the close of the 2019 60-day legislative session, Governor Michelle Lujan Grisham and her staff remain at the Roundhouse to determine which bills she should sign into law. The Governor and her team have plenty to sift through: 309 bills passed the legislature this year, the highest number in a decade.
Here are a few that could affect (or could have affected) job creation and continued economic growth in our state:
NEW TAXES: Legislation that included new taxes and some higher rates passed in the session’s closing minutes – it’s projected to increase state general fund revenue by $70 million next fiscal year. It includes new tax rates on e-cigarettes and cigars, vehicle purchases, and non-profit hospitals. It also includes a higher income tax bracket if revenue projects are not met. Opponents questioned the wisdom of increasing taxes in the midst of a record-breaking surplus.
OUTDOOR RECREATION: Governor Michelle Lujan Grisham has already said she will sign legislation that creates an outdoor recreation division with the state Economic Development Department. The division will seek to expand New Mexico’s outdoor economy, which according to the Outdoor Industry Association, accounts for 99,000 direct jobs and $623 million in state and local tax revenue.
STATE REVIEW: A bill to create an additional multi-agency environmental review process for any project or activity that required state approval, which would include any economic activity on state land, stalled in the House. It was opposed by multiple economic development organizations and chambers of commerce. The Albuquerque Journal editorial board said it would be tantamount to hanging a “closed-for-business notice” on the state.
FILM CREDITS: The Governor has also said she will sign a bill to increase the state’s $50 million cap on film tax credits to $110 million. It will also pay up to $225 million in rebates in the next fiscal year toward a backlog that accumulated under the current cap. According to the Economic Development Department, the film industry has accounted for $3.4 billion in direct spending in New Mexico since 2003.
ROYALTIES: Companion bills to increase the royalty rates the State Land Office can collect from oil and gas development on state land failed to advance out of either chamber. Each would have increased the cap from its current 20% to 25%. A study by the New Mexico Tax Research Industry found New Mexico, among all states in the region, already receives the largest share of revenue relative to the value of our oil and natural gas production.
FRACKING BAN FAILS TO ADVANCE: A proposal to ban fracking in New Mexico – which could have undercut our state’s economic momentum by zeroing out a critical source of public revenue – attracted plenty of headlines after it was proposed. However, the measure did not move out of its first committee. The ban’s lack of support reflects New Mexico’s balanced approach to development, which values conservation as well as continued economic growth.