Senators present citizen tax rebate proposal; committee hears support but takes no final vote

Senate Bill 398, a proposal to provide a recurring citizen income tax rebate to New Mexicans, was introduced and discussed in the Senate Tax, Business and Transportation Committee on Feb. 28. The bill’s sponsors described the measure as a $500-per-resident rebate paid annually over a seven-year period, with eligibility tied to filing a state individual income tax return.

Senator Thornton, one of the bill’s sponsors, told the committee the proposal would “give a billion dollars back to the people of New Mexico” over time and argued the state’s permanent fund and recent oil-and-gas revenues make the plan affordable. Co-sponsor Senator Jay Block said the rebate would help low- and moderate-income households meet basic costs and compared the plan to programs in other cities and states.

Committee members raised constitutional and budgetary questions during debate. Senator Jadamil asked whether refundable tax credits like the rebate would implicate the state constitution’s anti-donation clause; sponsors said they had reviewed the issue and believed the proposal would not violate the clause. Other senators urged caution about trade-offs with existing budget commitments — including behavioral health investments and reserves — and recommended further study during the interim.

No committee vote was recorded for SB 398 during the hearing. Multiple senators said they supported the concept while noting the measure would be better considered earlier in the budget process or next session; sponsors signaled plans to continue work during the interim.

Ending: The committee did not take final action on SB 398. Sponsors and supporters urged additional study and recommended trying to include a similar idea earlier in the budget process next year.