New Mexico Gov. Michelle Lujan Grisham vetoed large portions of a tax package on Friday, cutting out income tax credits for electric vehicles, energy storage systems and geothermal electricity production.
The tax credits fell victim to budgetary caution on the part of the governor, who said items she vetoed within House Bill 547 would have reduced the state’s annual revenue by $1.1 billion.
“These large reductions would risk significant funding cuts in future years for critical services,” the governor said in a statement.
Friday was the deadline for Lujan Grisham to sign bills from the 2023 legislative session. Bills on which the governor took no action were “pocket vetoed.”
Among this year’s pocket vetoes was HB 365, which would have established a geothermal center of excellence at the New Mexico Institute of Mining and Technology along with grant funding for developing geothermal projects. The House passed the bill on a 63-3 vote; the Senate vote was 37-0.
Camilla Feibelman, director of the Sierra Club Rio Grande Chapter, said the tax credits for EVs, energy storage and geothermal development would have been “a drop in the bucket” of New Mexico’s budget. And the credits would have boosted emerging industries, Fiebelman said in a statement on Friday.
“We are facing a climate emergency that requires emergency action, not vetoes,” Fiebelman said.
Friday’s vetoes were just the latest disappointment for environmental groups regarding the state’s 2023 legislative session, which saw few climate-related bills make it to the governor’s desk.
Senate Bill 520, which set targets for reducing greenhouse gas emissions, failed to make it out of its first committee. (See Emissions Bill Stalls in New Mexico Senate.) A similar bill failed in the legislature’s 2022 session, but advocates had hoped it would fare better during this year’s longer, 60-day session. Sessions in even-numbered years are 30 days and are focused on budget issues.
“It felt like we had really good momentum, but it fell apart early in the session,” Ben Shelton, political and policy director with Conservation Voters New Mexico, told NetZero Insider. “There just was not the appetite to fight with the oil and gas industry and hold them accountable.”
Shelton said another disappointment was an effort to establish a “transition division” in the Economic Development Department to pursue funding for communities transitioning away from an oil and gas economy. Language establishing the division got rolled into HB 12, the Advanced Energy Technology Act, Shelton said, and the bill never made it out of committee.
Another failed bill was HB 426, a proposal for a low-carbon fuel standard. It was at least the third try for the state legislature to pass an LCFS bill, and Lujan Grisham’s administration had backed the proposal. (See LCFS Bill Emerges in NM House as Session Nears Close.)
The bill cleared two committees and was sent to the House floor, where it was never voted on.
In remarks on Friday, Lujan Grisham said New Mexico would continue to be a leader on environmental issues, the Santa Fe New Mexican reported. She said the Sierra Club should be celebrating the creation of the Land of Enchantment Legacy Fund, which was established by SB 9.
The $100 million conservation fund will support water stewardship, forest health, outdoor recreation and wildlife species protection. Lujan Grisham signed the bill last month along with SB 72, which creates a fund to carry out a wildlife corridor plan, aimed at reducing vehicle collisions with wildlife.
Another bill signed into law was SB 53, which prohibits storage of high-level radioactive waste in New Mexico without the state’s consent. The bill was reportedly intended to block Holtec International’s proposed nuclear waste storage project in southeast New Mexico.