No Tax Breaks, Just Government Growth

New Mexico is experiencing an extraordinary oil and gas boom, with the state projected to collect a staggering $13.6 billion in revenue from the industry. This influx far exceeds Governor Michelle Lujan Grisham’s proposed budget for fiscal year 2026, which totals $10.9 billion—a 45% increase in spending since she took office in 2019.

However, despite this windfall, taxpayers and businesses shouldn’t expect any relief from the state government. Governor Lujan Grisham’s proposed budget includes no tax cuts or rebates. Instead, the plan calls for a nearly 7% growth in government spending, if adopted.

The New Mexico Legislature will soon present its own budget proposal for the 2025 session, but don’t expect much support for tax relief from lawmakers. Senate Finance Committee Chair George Muñoz, considered a moderate Democrat, downplayed the value of rebates, claiming they are “pretty much a waste of money” and suggesting that the state should redirect those funds into trust funds for long-term use.

While the Rio Grande Foundation favors tax cuts and reforms over rebates, Muñoz’s dismissal of rebates is misguided, especially when the alternative is for the government to hold onto the excess revenue in sovereign wealth funds or funnel it into ineffective programs. Unfortunately, New Mexico voters have once again chosen legislative candidates who prioritize expanding government control without addressing the state’s real problems.

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