The Santa Fe New Mexican‘s editorial opposing the elimination of New Mexico’s personal income tax contains a misrepresentation of what House Republicans are proposing, as well as a fundamental misunderstanding of how New Mexico’s finances work.
Contrary to the claims made by The New Mexican‘s editorial writers, we explained in our letter to the governor requesting a special session to eliminate the personal income tax how such action would not result in any budget reductions in the day-to-day operation of state government. The reason budget reductions would not be necessary for public schools, health care, law enforcement, and other critical services is because even after eliminating the personal income tax, state revenues would still exceed $12 billion while the state budget spends only $11.3 billion on its day-to-day operations. In addition, revenues would still be available to permit the Legislature to fund so-called one-time spending programs, which have grown at an alarming rate during the oil revenue boom.
We also explained how additional one-time, or nonrecurring, spending could be funded by utilizing more than $11 billion in newly created state trust funds and an upcoming $2 billion payment from the federal government from oil and gas lease sales. At no time did House Republicans propose raiding our state’s sovereign wealth funds, such as the Land Grant Permanent Fund or the Severance Tax Permanent Fund, to offset any revenue lost from eliminating the personal income tax. Nor did we call for using one-time dollars to pay for the daily or recurring expenditures of the state government.
Equally important, the editorial ignores the state’s current fiscal reality.
New Mexico is not struggling to meet its recurring obligations. Quite the opposite. As noted above, the state is collecting recurring revenues that exceed recurring expenses, allowing billions of dollars in nonrecurring spending year after year. That means New Mexicans are being taxed beyond what is necessary to fund ongoing government operations. Instead, we propose allowing New Mexicans to keep more of their own money rather than allowing the government to spend more and more.
The editorial also argues that tax reform should focus exclusively on the gross receipts tax. We agree that New Mexico’s GRT system desperately needs reform. It pyramids taxes, creates economic distortions, and is among the most complicated tax systems in the country.
The problem is that New Mexico has had numerous opportunities over the years to enact meaningful GRT reform. Each time, the Legislature has largely settled for incremental adjustments while leaving the underlying system intact.
Moreover, GRT reform is extraordinarily complicated because local governments rely heavily on gross receipts tax revenue. Every significant change affects municipalities and counties differently, making consensus difficult.
Repeal of the personal income tax, on the other hand, presents a better opportunity.
Unlike gross receipts taxes, which are paid by residents, visitors, and businesses, reducing or eliminating the personal income tax directly benefits New Mexico’s families and workers. It allows residents to keep more of what they earn, making New Mexico more competitive in attracting workers, entrepreneurs, and investment.
More disposable income circulates through local businesses, generating additional gross receipts tax collections without raising tax rates. While no tax reform pays for itself, stronger economic growth broadens the tax base over time rather than relying on continually increasing tax burdens.
While debate over the best approach to tax reform is important, such debate must begin with an accurate portrayal of what House Republicans are proposing. There also needs to be a better understanding that eliminating the personal income tax does not require major spending reductions in important state programs.
House Minority Leader Gail Armstrong (R- Magdalena) has served as the Republican leader since 2025 and has served in the New Mexico House of Representative since 2017.