An environmentalist's early look at New Mexico's legislative session
An environmentalist's early look at New Mexico's legislative session
Old ideas, new ideas, and a bigger budget than ever.
2023 is a tough year to summarize from a climate perspective. While massive amounts of investment went into clean energy projects around the world - it may have been the hottest year in 100,000 years - and oil extraction hit record highs globally and locally.
I hesitate to say that there was little accomplished in 2023 to combat climate change, because unprecedented accomplishments happened in the climate space, but in the grand scheme of things, we didn’t do enough. For example, New Mexico adopted Advanced Clean Cars 2, an electric vehicle rule that decreases greenhouse gas emissions from transportation by a significant amount over the next couple of decades, but New Mexico also just extracted more oil and gas than it ever has before - proof that much greater structural change is needed.
Despite this bleak reality of climate change and our growing appetite for oil, I am annually hopeful for meaningful climate action at New Mexico’s legislative session. After a regenerative holiday break, I’m ready to endure New Mexico’s 2024 legislative session that starts on January 16th. I have hope that some climate bills will pass, but there are a lot of pressing issues and very little time in New Mexico’s budget-focused, 30-day session.
I’ve compiled the environmentally-focused bills that have been pre-filed as of Thursday, January 11th, and I highlight some other climate and housing bills that may make it to the finish line this legislative session. Let’s dive in…
Prefiled bills to date
Clean Transportation Fuel Standard
The CTFS will take its fourth consecutive lap through the New Mexico Legislature. The proposed bill would give the state Environmental Improvement Board (EIB) the ability to create a CTFS rule.
According to the New Mexico Environment Department, “The clean fuel standard is designed to reduce the carbon intensity of the state’s transportation fuel mix over time.” Any fuel producer, whether it be gasoline, diesel, electricity, biofuels, hydrogen, etc., that produces a transportation fuel that exceeds the carbon intensity threshold set by the EIB will need to purchase credits from producers that satisfy the threshold. This system creates an incentive and revenue stream for fuel producers who sell cleaner fuels.
NMED has informative and trustworthy CTFS information on the Climate Change Bureau website, including this somewhat somber video below.
This bill would create the Transportation Trust Fund and allow money to be disbursed to the state Road Fund, which is currently funded by gasoline and diesel fuel taxes, vehicle sales taxes, registration fees, and commercial trucking taxes. While vehicle sales taxes, registration fees, and trucking will likely all stick around for a while, the state has committed to rapidly adopting electric vehicles - spelling doom for the relied-upon gas and diesel tax revenues. The Transportation Trust Fund, I presume, could help the state create a rainy day fund for future road maintenance in post-gasoline New Mexico.
If I were to change anything about the bill, I would make it transportation-mode-agnostic - meaning the Transportation Trust Fund could make transfers to the state Road Fund, but also make investments in transit depots, bicycle infrastructure, Rail Runner improvements, and other modes of transit that are economical and environmentally-friendly.
This bill would enable school districts to switch their fleets to electric buses, conduct a feasibility study, and allow school districts to enter into energy storage agreements. Electric buses are expensive, but they have many benefits. Children who ride electric buses aren’t exposed to the disease-causing exhaust of a diesel engine, greenhouse gas emissions drop dramatically, and communities could benefit from energy security and storage provided by the fleet of electric buses.
Electric school buses, when they are not transporting kids around town, will sit in the parking lot connected to a charger, acting as a battery bank for the grid. If the demand for electricity goes up nearby, the school buses could provide energy from their massive batteries to the neighborhood, easing electricity demand in the area. It could be a way to reduce GHG emissions, keep kids healthier, provide opportunities for school districts, diversify the economy, and foster energy security.
Other pre-filed environmental bills and resolutions
Statewide Public Health & Climate Program
The Energy Storage System Income Tax Credit
Geothermal Resources Project Funds
Geothermal Electricity Generation Tax Credit
Bills that are expected, but not yet filed
Democrats in the state House of Representatives are looking to create a Local Solar Access Fund - a lending program that would operate through the New Mexico Finance Authority (NMFA). NMFA would then identify and finance solar projects for municipalities, counties, and school districts around the state. Szczepanski told Albuquerque Business First, "This program is part of a long-term investment in New Mexico's economic future, as well as our climate future...”
The New Mexico Finance Authority, where I am a credit analyst, was created by the legislature in 1992 to finance infrastructure projects around the state. Today, NMFA finances a broad range of things: fire trucks, police cars, waterlines, schools, stadiums, businesses, and more.
Opportunity Enterprise Revolving Fund - Affordable Housing
Another NMFA appropriation: The governor's office is suggesting, “$250 million to the New Mexico Finance Authority Opportunity Enterprise Revolving Fund to increase funding for affordable housing, including developments of low-income multi-family housing, down payment assistance for low and middle-income households, homeowner rehabilitation and weatherization programs, etc.”
The Opportunity Enterprise fund was created in 2022 to finance commercial real estate development and attract businesses to New Mexico. This proposal could spur affordable housing investments through low-rate loans that would not otherwise be made - possibly creating denser, more walkable communities where housing is needed the most.
Governor Lujan-Grisham’s administration highlighted the state’s pursuit of an EV tax credit during the 2024 session at a legislative hearing in November. They noted that the size and scope of the credit are still being studied, but they aim to help low-income families and small businesses.
The Governor scrapped an EV tax credit via line-item veto after last year’s legislative session - a move that surprised many. According to the AP, the credit last year would have been up to $4,000 for EV customers.
High-Speed Rail from Chihuahua to Denver
Senator Soules is once again bringing his high-speed rail idea to the legislature, this time stretching from Denver to Chihuahua. He is expected to sponsor two bills - one that would study the costs and benefits of the project, and another that would finance the portion of the project that runs through New Mexico.
It’s an awesome idea, expensive for sure, but may be worth studying. Unfortunately, it probably doesn’t have the political backing that would be necessary to get this bill to pass. Especially in a short session.
As much as I would love to catch a high-speed rail from Albuquerque to Colorado or Mexico, I think a more realistic and incremental approach to better transit is more appropriate for the state legislature. For example, the legislature could: fund Rail Runner improvements to increase ridership, frequency, and reach; finance transportation hubs in municipalities; implement Complete Streets policies; etc.
So far missing from the party, the Clean Futures Act is a bill that has been introduced to the legislature before but has not been prefiled yet and hasn’t been spoken about in the media yet. Last year, after the session, I reported:
This bill would have set New Mexico’s emissions reduction goals into law. Originally set by Governor Michelle Lujan-Grisham in a 2019 executive order, New Mexico’s emissions goals are vulnerable to political disruption if a Republican were to win the governorship in 2026…
If the State attempts to pass the Clean Future Act again next year (and they should), it should include mechanisms that will help the state achieve the emissions goals.
Other climate bills that did not pass in 2023 but could reappear this year
The Budget
The Legislative Finance Committee (LFC) suggested increasing the budget to $10.1 billion, a record high, thanks to windfall tax income from oil and gas activity. A recent LFC press release states:
“After two years of record-setting income, the FY24-25 budget is a reminder that we must meaningfully invest in programs that truly help and work for New Mexico, while simultaneously protecting the state from future revenue shortfalls,” said Senator George Muñoz, LFC chairman and chair of the Senate Finance Committee. “The committee’s recommendation ensures the state never has to ride the oil and gas rollercoaster again by prioritizing essential growth in services that are proven to improve the lives of New Mexicans, creating expendable trusts to address critical future funding needs in the state, and most importantly, ensuring we maintain robust reserves to weather any future rainy days we may experience.”
The volatility of the oil and gas sector worries the legislature, so they are building these trust funds to diversify the state’s tax base and save up for the day oil revenues stop (which will eventually have to happen). LFC budget recommendations include a 5% increase in funding for the Environment Department and a whopping 10.6% increase for the Energy, Minerals, and Natural Resources Department.
The Governor also gave her budget recommendations:
Gov. Michelle Lujan Grisham released the FY25 executive budget recommendation. The budget totals $10.5 billion in recurring spending, a 9.9% increase from the last fiscal year. The executive recommendation will maintain reserves at 34.2%. The budget directs meaningful investments in key areas including housing, education, child wellbeing, public safety, health care, economic development, and water and natural resources.
According to a source at the Department of Finance and Administration, the legislature typically passes a budget that resembles recommendations from the LFC.
We shall see what happens.
The legislature has a lot to juggle over the next month, but I remain hopeful that environmental issues won’t get lost in the sea of important topics addressed at the Roundhouse. I will keep you all updated on the biggest environmental stories of the session as it unfolds.
Currently unfolding outside is a cold and windy winter that is a far cry from the heat we experienced in the summer of 2023. Let’s try to remember that heat as we debate the future of New Mexico during a cold legislative session.
If you’re a New Mexico resident, find your legislator here, call them, and voice your support for a couple of these bills that are important to you.