Introduction

The 2024 Legislature adjourned at noon on Thursday, February 15, having considered 344 House bills and 317 Senate bills over the course of 30 days. Seventy-two bills were approved by the Legislature. Of the 72 bills, Governor Michelle Grisham signed 69 bills and vetoed three. In her press conference shortly after the close of the session, the governor noted that she was frustrated that many of the public safety measures were not enacted by the 2024 Legislature. The governor was also frustrated with the defeats of several environmental bills relating to water treatment and increasing oil and gas royalty rates.

Special Session

The governor, who was disappointed at what she saw as inadequate programs on public safety legislation she supported, indicated that she may call a special session on the public safety issue. No date has been set, nor are we certain that such an event will materialize.

The official filing day for the state’s 111 legislative seats was filled with a number of surprises. Senator Greg Baca, Senate minority leader from Belen, did not file for re-election, nor did House Minority Leader Ryan Lane from Aztec. There were a number of surprises in that Senator Bill Burt (R-Alamogordo) and Representative Jason Harper (R-Rio Rancho) decided not to seek re-election.

Overall, there are 23 members of the 112-person Legislature that have chosen not to seek re-election including four House members that are running for a seat in the state Senate.

Legislative Retirements and Races

Current senators who have indicated that they will not seek re-election:

• Ron Griggs (Alamogordo)
• Brenda McKenna (Corrales)
• Mark Moores (Albuquerque)
• Steven Neville (Farmington)
• Jerry Ortiz y Pino (Albuquerque)
• Cliff Pirtle (Roswell)
• Nancy Rodriguez (Santa Fe)
• Gregg Schmedes (Bernalillo County)
• Bill Tallman (Albuquerque)
• Bill Burt (Alamogordo)

Current House members who may not seek re-election:

• Bill Rehm (Albuquerque)
• Gail Chasey (Albuquerque)
• Candy Ezzell (Roswell) — will run for Senate seat
• James Townsend (Artesia) — will run for Senate seat
• Larry Scott (Hobbs) — will run for Senate seat
• Ryan Lane (Aztec)
• Jason Harper (Rio Rancho)
• Anthony Allison (Fruitland)

Tax Package (HB 252)

The Legislature enacted a tax package that will result in a net general fund loss of $227 million in FY 26, the first full year in which the tax cuts are felt. The loss would have been $300 million but for the increase in tax revenue gained by flattening the corporate income tax to 5.9%, which increases revenues by $16 million, and reducing the capital gains deduction, which increases revenue by $61 million.

Some of the other tax revisions included in HB 252 include:

• Reforms personal income tax brackets without any tax increases;
• Adds GRT deduction for Medicaid recipients’ home renovations;
• Changes capital gains deduction to $2,500 or 40% for the sale of a New Mexico business valued at not more than $1 million;
• Eliminates lower corporate income tax bracket, making it a flat 5.9% rate for all corporate income; and
• Ensures receipts derived from copayments or deductibles by health care providers are GRT deductible.

Paid Family and Medical Leave Act (SB 3)

Clearly, one of the most controversial bills considered by the 2024 Legislature was SB 3 (Stewart), the Paid Family and Medical Leave Act. This was the fourth session in which the issue has been addressed, and, again, SB 3 was defeated in the House 34-36, with 11 Democrats joining all House Republicans voting against the legislation. Opponents cited the following reasons for opposition: the ease with which the law could be abused, inadequate protection for employers, the program’s fiscal unsustainability, the unrealistically large amount of leave (12 weeks) that could be taken every year for a wide range of purposes, the imposition of a tax on employers and employees to create the program, and the disruption the program would have on workplaces, especially for small businesses.

Budget

The Legislature approved a budget of $10.2 billion for the next fiscal year beginning on July 1, 2024, an increase of over 6% from the current year. Reserves will be held at 30%. Some of the budget highlights include:

• $10.5 million for the Local Economic Development Act job creation fund (LEDA);
• $6.7 million for the Job Training Incentive Program (JTIP);
• $100 million for career technical education;
• $750 million for road maintenance construction and improvements;
• $50 million to shore up rural hospitals;
• 3% compensation increase for all state employees;
• $50 million to the NM Housing Trust Fund and $50 million to the Affordable Housing Act;
• $125 million to the NM Finance Authority for the Opportunity Enterprise Fund for housing development and infrastructure;
• $300 million for the Land of Enchantment Fund to support natural resource projects; and
• $15 million for medical professionals’ loan repayment assistance.

General Obligation Bonds

The legislation authorizes the issuance of general obligation bonds totaling approximately $289.6 million. The bill includes bond issues for senior citizen facilities statewide ($30.4 million), library resource acquisitions ($19 million), and higher education, special school and tribal school capital improvements and acquisitions ($229.6 million).

Capital Outlay Projects (SB 275)

The legislation appropriates in excess of $1 billion to capital outlay projects statewide, including $932.2 million from the general fund and $73.5 million from other state funds. The appropriations contained in the legislation are non-recurring expenses for state agencies, higher education, judiciary, individual legislative and governor’s projects.