By Paul Gessing

New Mexico's Legislature continues to meet in Santa Fe. Sadly, it continues along the same trajectory it has been on in recent years where the government spending grows while also keeping more of our money and (often) adding an ever-increasing number of taxes for us to pay.

For starters, the House recently passed a budget that increases spending across all areas of New Mexico government. An amendment was offered by Republicans to rebate a portion of the money ($600 each) to average New Mexicans. The plan was rejected by Democrats.

That's by no means the only plan offered in Santa Fe to reduce burdens on New Mexico families. I had the opportunity to present expert testimony on HB 275 which would have eliminated New Mexico's personal income tax. Nine other states have no income tax. Two states (Alaska and New Hampshire) have no income or sales tax. Having no income tax would instantly make New Mexico competitive with other states for investment, business relocation, and economic growth.

Sadly, plan after plan to return some portion of New Mexico's current budget surpluses has been rejected by Democrats in the Legislature. This, despite New Mexico having $13.5 billion in general fund revenues with the House-passed budget totaling "only" $10.8 billion.

Clearly, New Mexico has plenty of money, but where is it going? Aside from 6 percent spending growth this year and 70% growth since Michelle Lujan Grisham took office, the State is simply hoarding cash. According to a recent article in the Santa Fe New Mexican the State Investment Council now has a mind-blowing $61 billion under its management.

This may seem like a good thing, but it isn't.

For starters, New Mexico has plenty of serious problems that could be addressed by returning some of this money to taxpayers. The State's economy is widely known to be too dependent on oil and gas revenues. New Mexico's population is among the poorest states in the nation with nearly half its citizens on Medicaid.

New Mexico also has a rapidly aging population that has not grown much (especially relative to its neighbors) for years. This is unique in the fast-growing American southwest which is home to some of the fastest-growing states in the nation. Clearly it is driven by public policy decisions out of Santa Fe.

Specifically, one of the bills that seems likely to become law this session is HB 417. The bill would impose a new "point of sale" tax on alcohol of 6% on top of numerous other taxes. The bill is being pitched as a way to reduce the harms of alcohol abuse, but it was amended in committee to exempt New Mexico brewers, distillers, and winemakers. Exempting in-state producers from a tax increase that is supposed to reduce alcohol abuse makes no sense.

Many bills moving in the 2025 legislative session would impose further taxes on New Mexico individuals and businesses at a time of unprecedented prosperity (and spending) for the State.

At the Rio Grande Foundation we support the oil and gas industry and think it will continue to supply jobs and tax revenues to New Mexicans for decades to come. But if you believe that oil and gas are on their way to irrelevancy, shouldn't we use these revenues to diversify our economy now?

Paul Gessing is president of New Mexico's Rio Grande Foundation, an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.