Sherry Robinson

Few subjects inspire as much fuzzy math and fuzzier thinking as taxes. It was just one reason New Mexico’s governor not only vetoed House Bill 14 but stomped all over it and lambasted

Democrats in a smoking veto message:

“In a session where the Legislature found time to pass three separate license plate bills and designate an official state bread, it is deeply disappointing that they waited until the final days — indeed, the final hours — of the 2025 legislative session to take up a tax package. Even more troubling is the fact that what ultimately emerged lacked both strategic coherence and fiscal credibility. There was no plan and no preparation for how to pay for the tax relief in this bill. As a result, the Legislature had to delay any meaningful tax relief for working families until Fiscal Year 2027, despite the state sitting on more than $3 billion in one-time revenues and over 30% in reserves. That is not prudence — it is paralysis.”

HB 14 was actually 16 previously tabled bills that Dems stitched together into a crazy quilt. Its sponsors were House Speaker Javier Martinez and Taxation and Revenue Committee Chairman Derrick Lente. It had something for everyone, but the major component was a tax credit that would have effectively eliminated income taxes for some working families.

The challenge, as usual, was how to pay for it. They seized on a new 0.28% oil surtax.

That idea met strenuous objections from the industry and the business community. As Dems would learn, the president’s trade war has injured the state’s golden goose by driving down oil prices and driving up the cost of equipment and supplies. The price of West Texas Intermediate crude oil was $71 a barrel when the bill was introduced, $67 when it passed the House and $61 when the bill was vetoed.

That wasn’t the only hurdle. The oil tax would have raised $130 million. House Dems needed $72 million for their income tax proposal. The Senate’s tax committee added $70 million of its own tax breaks. You can see this doesn’t add up. And the Senate stripped out the oil tax.

House and Senate were at loggerheads until the day before adjournment. During last minute meetings, the Senate refused to budge on the oil tax. The final compromise involved paring down tax breaks and pushing them into fiscal 2027, so lawmakers next year would have to figure out how to pay for them. It’s no way to run a railroad, although Dems said they could use the bill as a template for action next year.

Fuzzy thinking also afflicted Republicans, who introduced HB 275 to do away entirely with personal income taxes. This would have cost $1.8 billion in fiscal 2026, according to legislative analysis. Their reasoning, backed by no studies whatsoever, seemed to be that with this big budget surplus, surely we can get rid of income taxes. Trouble is, the surplus is one-time money, not recurring money. The bill was never heard in committee.

The governor accused HB 14 sponsors of “decision-making driven more by political self- interest than public good.” Seeing machinations in Congress to justify tax breaks for the rich, Martinez and Lente referred to their legislation as “the tax fairness bill,” one of many on a list of Democratic bills to help low-income and middle class people.

“Fundamentally, this tax package is about fairness and putting our values into action,” said Lente in a news release. “We are cutting or fully eliminating income taxes for 300,000 hardworking New Mexicans who power our economy, while also making sure that the prosperous multi-billion-dollar industry that profits from the extraction of our natural resources pays its fair share.”

Its “fair share” is a third of the state budget.

Lente insisted the tax would fall on Big Oil despite Republican arguments that it would also hit Small Oil. Not everybody here is Exxon. When the Rs argued that the tax would hurt the oil industry, Dems countered that the president’s tariffs, layoffs and mass deportations were hurting everybody. That’s all true, but it’s not the basis of tax policy.

If either party was serious about meaningful tax change, they would have started long before the session in the interim tax committee. Then they could think and deliberate. They could make a plan, hear testimony and draft bills. Instead, HB 14 seemed to come out of nowhere and spring to life, like an accidental collision of cells in a petri dish.

Sherry Robinson is a long-time New Mexico reporter and editor. She has worked in Grants, Gallup, the Albuquerque Journal, New Mexico Business Weekly and Albuquerque Tribune. Her columns won first place in 2024 from New Mexico Press Women.