Senate committee advances tax omnibus with EITC expansion and oil surtax after contentious hearing

A Senate committee voted to advance a House committee substitute for House Bill 14, a tax omnibus package that would expand New Mexico's earned income tax credit (EITC) and add a revenue surtax tied to oil prices. The measure passed the committee after amendments and a contentious public hearing that included business groups, environmental advocates and anti‑poverty organizations.

Why it matters: Sponsors said the package would extend and strengthen an existing refundable credit for working families and pay for the expansion with a modest surtax on oil production when prices exceed a threshold. Supporters argued the proposal is progressive and will reduce poverty and stabilize state revenue; industry groups warned the surtax would add volatility and could harm small producers.

The bill sponsor and committee presenter described an approach that brings the oil and gas tax rates closer together — raising the oil rate from 3.15% to about 3.43% by adding a 0.28 percentage‑point surtax on oil while lowering the natural gas rate to 3.9% — producing an estimated $130 million in revenue after changes from earlier proposals. The presenter said an earlier House version had projected higher revenue but had been reduced after negotiations with industry and members.

Advocates who testified in favor included the Sierra Club Rio Grande chapter, New Mexico Voices for Children, the League of Women Voters, New Mexico Thrives and civic business groups arguing the EITC expansion will help low‑income workers, increase economic stability and decouple the state credit from potential future federal changes.

Industry groups opposed the surtax. Ashley Wagner of the New Mexico Oil and Gas Association and other trade representatives cautioned that the oil and gas sector is volatile, provides thousands of jobs and that a surtax could discourage investment and risk production and employment. The Permian Basin Petroleum Association and the Independent Petroleum Association of New Mexico said the surtax could squeeze small producers and accelerate consolidation in the sector.

The committee also considered and adopted an amendment that raises revenue through an excise adjustment on non‑craft alcoholic beverages (described in the amendment as a 20% increase to certain liquor excise components). That amendment was adopted by voice and roll call before the committee proceeded to a final vote on the committee substitute.

Final action: The committee approved the committee substitute on a roll call that recorded six members in favor and four opposed. The transcript contains detailed debate on trigger provisions: sponsors said the surtax revenue collection would pause if the price per barrel falls below $55 for a six‑month period; tribal production would continue to receive applicable credits against state liability.

What’s next: The committee substitute will move to the full chamber for further consideration; sponsors and opponents indicated additional floor debate is likely.