Dems again propose gas tax hike to ease state’s fiscal crisis

A statue outside the Roundhouse in Santa Fe.

Heath Haussamen /

A statue outside the Roundhouse in Santa Fe.

With New Mexico running on empty, two lawmakers have filed separate bills to add a dime per gallon to the gasoline tax for road maintenance and to replenish the state’s depleted reserves.

Sen. John Arthur Smith, D-Deming, on Monday introduced his bill, which would split the additional revenue from the gas tax. Half would go to building and maintaining roads and half to the state’s reserves. Once New Mexico has socked away the equivalent of 5 percent of its general fund, the rest of the gas tax would also be used for roads.

Assuming the Legislature is able to overcome Gov. Susana Martinez’s opposition to a tax hike, Smith anticipates the 10-cent increase would generate about $140 million in one year, though not in time to help close a projected $69 million deficit for the fiscal year that ends in June.

Sen. Clemente Sanchez, D-Grants, has also proposed raising the gas tax by 10 cents per gallon. Under his bill, the money could eventually be used for building and maintaining roads. But initially the entire amount would go into reserves until the state has saved up the equivalent of 10 percent of its general fund.

The state has spent its most of its reserves during the last couple years as revenue from oil and gas production has declined.

New Mexico had about 11 percent of its general fund stashed in reserves as of June 2015. But at the end of 2016, only about 2.3 percent, or $145 million, remained for emergencies.

Legislators and staff say New Mexico could see its bond rating slide lower and end up paying more to borrow money unless the state rebuilds its savings account.

Moody’s lowered New Mexico’s credit outlook last year, a decision the firm said was based partly on the amount of cash the government kept on hand.

Democratic lawmakers have proposed raising the gas tax several times in recent years, but the effort didn’t gain momentum.

New Mexico’s gas tax is the nation’s fifth-lowest, according to the American Petroleum Institute. The state charges 17 cents per gallon, but drivers end up paying 37.19 cents per gallon when federal taxes are added.

An extra dime would still leave the gas tax in New Mexico below the national average of 49.44 cents per gallon.

But the Republican governor has remained steadfastly opposed to raising any taxes.

“It’s up to state government to tighten its belt, not New Mexico families,” the governor told reporters this month when presenting her proposed budget.

Smith, though, said legislators have few other choices in the midst of a financial crisis he described as the governor’s making.

“The Democrats are in a position of trying to do what’s responsible,” he said. “We’re where we are because of this administration.”

Contact Andrew Oxford at (505) 986-3093 or [email protected]. Follow him on Twitter at @andrewboxford.

This BBSNews article was syndicated from, and written by Heath Haussamen, Read the original article here.