Heath Haussamen
As billionaires destroy our society, a proposal making its way through the N.M. Legislature gives state government an opportunity to resist.
The House passed legislation on Saturday that would take more money from oil companies and put it in the hands of working New Mexicans.
House Bill 14 would raise $130 million each year with a new surtax on oil, which Rep. Derrick Lente, the bill’s sponsor, said would be paid mostly by multi-national corporations. The bill would also exempt an additional 101,000 New Mexicans from paying personal income tax.
New Mexico has a long history of dependence on extractive industries, Lente told his colleagues during debate on Saturday. We pay the price in environmental and other impacts. And someday, there won’t be any more oil to take.
So the idea of pairing the two proposals — to require companies to pay more for the “privilege” of taking our oil and give the extra money to New Mexicans — represents “a tax paradigm shift,” Lente said.
“This is tax justice,” said Lente, a Democrat from Sandia Pueblo who chairs the House Taxation and Revenue Committee.
The House voted 40-27 to send the legislation to the Senate for consideration. The expanded income tax exemption will cost about $75 million, so there’s space for the Senate to add its own tax changes to the legislation.
‘Get the best deal for our state’
The idea for the increased tax on oil came when Rep. Nathan Small, a Las Cruces Democrat who chairs the House Appropriations and Finance Committee, discovered that the tax on oil was lower than that on natural gas. Small proposed legislation this session to increase the tax on oil to equal that on natural gas. That would have raised an extra $400 million or more in revenue for the state.
Following discussions with industry officials and others, Small and Lente reduced the proposed tax hike on oil and paired it with the income tax expansion. That smaller oil increase allowed a slight drop in the natural gas tax to equalize the two.
During Saturday’s debate, Small and Lente spoke about the economic instability the Trump Administration is creating. When House Republicans complained that the tax increase would destabilize the oil industry, the two shot back that it was Trump’s tariffs, layoffs and planned mass deportations that threaten the economy — not a small tax increase for an industry that makes billions off New Mexico each year.
“They are doing things that could significantly harm the workforce that is so vital for all parts of New Mexico, including within the oil and gas industry,” Small said. “We have to do the best we can — get the best deal for our state.”
The legislation includes a trigger point to protect the oil and gas industry. If oil drops below $55 per barrel, the new surtax would be suspended until it rises back above that point. That’s a reasonable protection for an industry that powers New Mexico’s state budget.
In exchange for the oil tax hike, a married couple with three children that makes less than $70,000 a year would pay no state income tax. A single individual with no children would pay no state income tax if he or she makes less than $25,000.
‘That’s a good deal’
House Speaker Javier Martínez applauded the expansion of the income tax exemption during Friday’s hearing on the bill in the Taxation and Revenue Committee, the day before the House floor vote.
“We’re capturing your law enforcement officer. We’re targeting your firefighter. We’re getting your level two or or level three teacher,” the Albuquerque Democrat said. “Heck, we’re even targeting your oil and gas worker.”
A day later on the House floor, Rep. Sarah Silva shared that Chaparral, an unincorporated community in her district that’s home to about 20,000 people, had a median household income of $46,102 in 2023.
Lente affirmed that the vast majority of people in that community would pay no state income tax if this bill is enacted. When Silva spoke about Chaparral, Lente said she was describing communities across New Mexico.
Silva, a Las Cruces Democrat, said it’s important to enact policies like this “that can pull people out of poverty and do it in a really systemic and structural way.” Because of the expansion of the state income tax exemption, she said, “We will see an impact on the health and wealth of our local communities.”
Lente said state income tax liability would be “completely extinguished” for minimum wage workers and many families by “utilizing a new tax liability for out-of-state, multinational corporations.”
“That’s a good deal,” Lente said.
He’s right.
It’s our oil
It’s our oil. That’s the line that stuck with me the past few days as the House debated this proposal to impose a slightly higher tax for the privilege of taking our oil out of our ground in New Mexico.
We are a colonized state that is dependent on continued extraction of our natural resources. With the end of our oil supply in sight, New Mexico officials are working to reduce our reliance on the money it generates for our state budget.
Revenue from our investments was on track to surpass oil and gas income in just a few years. Then the Trump Administration intentionally tanked our economy with tariffs, agency cuts, layoffs and anti-immigrant madness aimed at paying for another tax cut for billionaires. Who knows what will happen now.
Regardless, if billionaires want to keep taking our oil, especially while they torch our democracy, they should pay more. Because of the havoc they’re causing New Mexicans, the price of them doing business in New Mexico should go up.
We can use the increased revenue to help insulate our people from the destruction billionaires are causing by letting working New Mexicans keep more of their hard-earned money.
Thanks to Small and Lente for having the courage to bring this proposal forward, and to the House for approving it. The Senate and governor should finalize this deal.
Disclosure. Rep. Silva is my spouse, and Rep. Small performed our wedding.