New Mexico governor, lawmakers offer options to raise road money

By Keith Goble, Land Line state legislative editor | 2/11/2015

New Mexico Gov. Susana Martinez recently revealed her plans to put hundreds of millions of dollars into needed road and bridge work. Other state lawmakers are also busy offering plans to address a transportation funding shortfall of about $250 million annually.

The Republican governor said during her recent State of the State address that state officials must pay close attention to an” aging highway infrastructure” that includes “roads that are unsafe, failing, and impeding economic growth.”

Her plan to address the issue relies on the Legislature’s annual infrastructure bond package, which is supported by the severance tax on oil and gas production. Specifically, she wants to set aside $300 million over the next five years to get major highway construction projects done across the state.

Rep. Larry Larranaga, R-Bernalillo, introduced the bill to accomplish the governor’s plan. The House Transportation and Public Works Committee is scheduled to consider the bill, HB92, on Thursday, Feb. 12.

Senate Democrats, which are the chamber’s majority party, say the governor’s plan is the wrong path to take.

“We certainly have many road and highway repair projects that are important, but it is wrong to borrow the funds to pay for them,” Sen. John Arthur Smith, D-Deming, said in a news release. “The governor’s road repair plan isn’t free money. Taxpayers will have to pay off the debt for these road projects.”

Instead, Smith, who chairs the Senate Finance Committee, is among the Democrats calling for a pay-as-you-go approach.

Smith introduced a bill, SB394, to raise the state’s fuel tax rates by a dime.

The tax increases would raise about $140 million a year, according to state estimates.

Currently, the state’s excise tax on gas is 17 cents per gallon and the tax on diesel is 21 cents per gallon. The rates have remained unchanged since 1993 and 2003, respectively.

His bill would raise the rates to 27 and 31 cents per gallon. The tax rates would also be indexed for inflation.

However, the likelihood of the tax increase getting very far is unlikely. Martinez has said she is opposed to tax increases and House-led Republicans have already acted this session to defeat a bill in committee that called for a 5-cent fuel tax increase.

Other funding options likely to get attention include a plan to return motor vehicle excise tax revenues to roads. Currently, all $145 million each year is sent to the state’s General Fund.

Sponsored by Sen. Carroll Leavell, R-Jal, SB214 would eliminate distribution of motor vehicle excise tax revenue to the General Fund over the next four years.

Sen. Ron Griggs, R-Alamogordo, is the sponsor of two bills to raise revenue for state and local roads.

  • SB113 would sell severance tax bonds totaling $600 million over the next six years for major projects around the state.
  • SB114 would authorize counties and municipalities to set a special tax on diesel purchases of up to 2 cents per gallon. Voters would need to approve the tax.

According to a fiscal impact report, officials with the New Mexico Department of Transportation are not clear how the local option diesel tax would fit into the International Fuel Tax Agreement or if out-of-state truckers would receive the appropriate credit for payments of the local tax.

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