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New Mexico Legislature approves payments to offset inflation

Democratic state Sen. Harold Pope of Albuquerque speaks to the New Mexico state Senate in Santa Fe on Tuesday. The Legislature was vetting a bill to provide tax rebates and payments to offset the rising consumer prices. (Morgan Lee/Associated Press)

SANTA FE – New Mexico will provide new payments totaling $500 for individual adults or $1,000 per household to offset steep prices for fuel and raging inflation, under a bill approved by the state Legislature.

A decisive 35-1 Senate vote sent the Democratic-sponsored bill for consideration to Gov. Michelle Lujan Grisham, who supports the initiative. The House voted 51-13 with broad support from Democrats and some Republicans.

In all, the aid package would distribute nearly $700 million to adult residents of all income levels, including elderly people with little or no income who don’t ordinarily file taxes and undocumented immigrants.

More than a dozen states are considering or implementing payouts to the public in response to raging inflation and budget surpluses, with some tax reductions also under consideration. Gas prices have surged to record highs in the U.S. amid the war in Ukraine and a ban on imports of Russian oil.

Republican state Rep. Larry Scott of Hobbs, with microphone, debates a bill to provide tax rebates and payments to offset high fuel prices and inflation, on the floor of the New Mexico House of Representatives in Santa Fe on Tuesday. (Morgan Lee/Associated Press)

Fuel prices are taking a bite out household finances at the same time that New Mexico state government is experiencing a financial windfall linked to record-setting oil production in the Permian Basin. New Mexico last year surpassed North Dakota to become the No. 2 oil producer in the nation behind Texas.

Supporters of the proposed payments including the governor say it is incumbent on the state to help people experiencing financial hardship because of inflation.

Some Republicans legislators warned that rebates might only stoke inflation further. They also questioned the timing ahead of the November general election as Lujan Grisham, a Democrat, seeks a second term in office.

Republican state Rep. Randal Crowder of Clovis said the payments could backfire in the long run.

“It’s going to be a good boost, but it's going to add to inflation,” he said. “It’s going to put more pressure and pain on people who are not going to be able to deal with it. ... We’re pouring gas on a roaring fire.”

Democratic Rep. Christine Chandler of Los Alamos, cosponsor of the rebate plan, says state payments would be staggered across several months to avoid predatory price increases.

Voters aren’t necessarily swayed by tax rebates, said Democratic House Speaker Brian Egolf.

“I really don’t think that the voters are going to decide whether or not someone should be elected governor on the basis of a tax rebate,” said Egolf, who is not seek re-election. "We’re going to make the right decision for the people of the state given the economic circumstances.”

Democratic state Rep. D. Wanda Johnson, a Navajo tribal member from Rehoboth, endorsed the inflation payments by invoking the vast driving distances between communities on the Navajo Nation in northwestern New Mexico – and the expense of abrupt changes in fuel prices.

“Those are a lot of miles,” she said. “The price tag begins to add up.”

Most New Mexico taxpayers already were due to receive a separate $250 rebate from the state in July, with the exclusion of upper-income individuals. Legislators in February approved an annual per-child tax credits of between $25 and $175 depending on household income.

The new initiative sets aside $20 million in payments on a first-come, first-serve basis for people who don’t file tax returns because they don’t make enough money. That provision is aimed largely at the elderly, but is open to all adults who can demonstrate residency.

State tax officials noted that the proposed tax rebates would be available not only to U.S. citizens but also undocumented immigrants who file taxes using a substitute tax identification number from the IRS.

Legislators also rebooted a vetoed bill containing $50 million in pet projects ranging from food banks to uranium mine cleanup and domestic violence shelters. Lujan Grisham has called for greater transparency in spending requests by legislators.

Democratic state House Majority Speaker Brian Golf speaks ahead of a special legislative session aimed at providing financial relief from rising inflation on Monday in Santa Fe. (Cedar Attanasio/Associated Press)