Senate panel considers gas-tax increase to fund road maintenance; debate over CPI indexing and equity
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Summary
Senate Bill 76 would raise New Mexico’s gas tax from 17¢ to 23¢ per gallon (special fuel from 21¢ to 26¢) and permit annual CPI indexing; proponents say recurring revenue is needed for road maintenance, opponents call the change regressive and demand DOT accountability and caps on indexing.
Senate Finance Committee members heard testimony and debate on Senate Bill 76, a proposal to raise the state gas tax from 17¢ to 23¢ per gallon and increase the special fuel tax from 21¢ to 26¢ per gallon, with changes taking effect July 1, 2026 and an option for CPI indexing going forward.
Mike Sandoval, a former cabinet secretary appearing as an expert witness, framed the measure as a source of recurring revenue needed for maintenance rather than one-time construction dollars. "This money will a lot of it will go for maintenance," he said, urging indexing tied to inflation so the state can better preserve road assets. Sandoval also noted New Mexico ranks near the bottom among states on gas tax levels.
Industry groups and trade associations offered mixed testimony. Franklin Garcia of the Asphalt Pavement Association backed the bill as a way to fund maintenance and complement a recently passed bonding package that focused on construction. Business groups opposed the bill. Matthew Stackpole of the Greater Upper Creek Chamber warned that higher fuel taxes raise operating costs and could undermine competitiveness. Carla Sonntag of the New Mexico Business Coalition called the proposal regressive and said recent revenue growth and other tax increases warrant accountability before raising fuel taxes further.
Senators pressed a range of policy questions. Some lawmakers expressed support for fixing roads but sought guardrails: whether CPI indexing should include an annual cap, how funds would be apportioned to local roads and whether DOT accountability measures should precede a tax increase. Senator Trujillo and others requested comparative data and a cap on indexing before a final vote.
After extended debate and offers to draft amendments, the committee elected to roll the bill over to the afternoon to allow additional analysis and proposed amendments to be prepared. The sponsor indicated further numeric modeling and possible amendments would be provided on return.