Relief bill means $600 rebates, tax holiday for restaurants

SANTA FE — A $200 million pandemic relief bill aimed at propping up hard-hit New Mexico essential workers and restaurants is headed to Gov. Michelle Lujan Grisham's desk for approval, after breezing through the state House on Wednesday.

The 66-1 vote to approve the bill, part of a larger pandemic stimulus package, happened at the end of a long House floor session.

Perhaps tired and screen-weary after lengthy debate on several other measures, House members did not offer any debate on the relief bill before voting to pass it.

"The past year has been devastating for New Mexico's restaurants and bars, as well as front-line essential workers, like janitors and grocery store workers," Rep. Javier Martinez, D-Albuquerque, a co-sponsor of the legislation, said after Wednesday's vote.

House Minority Whip Rod Montoya, R-Farmington, cast the only vote against the legislation.

Specifically, the measure, Senate Bill 1, would authorize $600 rebates for New Mexico workers who make less than $15 an hour.

It would benefit workers such as Lulu Moreno, an Albuquerque resident who works two jobs to make ends meet.

As a front-line worker — she works mornings in a school cafeteria and evenings as a shift manager at a fast-food restaurant — Moreno said she has been exposed to the coronavirus several times but has managed to avoid testing positive for the virus.

Still, she said the pandemic has been stressful, as her children have had to attend school remotely at home alone while she is at work.

"I'm a single mother of two with bills and a mortgage to pay, so that money would be very convenient," she said.

Specifically, the rebates would be targeted at the roughly 200,000 New Mexicans who qualify for the Working Families Tax Credit, which is available to those who make less than $31,200 per year.

That could include employees who have been at the front lines of the pandemic working at grocery stores, hospitals and other businesses.

However, only U.S. citizens or legal permanent residents would be able to receive the hazard pay bonus, according to a financial analysis of the bill, meaning seasonal workers and some immigrants would not qualify.

Restaurant tax holiday

The bill approved Wednesday would also authorize a four-month tax holiday — starting Monday — for restaurants, breweries, food trucks and other dining establishments.

The tax holiday would technically be a gross receipts tax deduction for restaurants, allowing them to retain tax payments.

Top-ranking Senate Democrats have said the model is based on a tax break for bars and restaurants that Colorado Gov. Jared Polis authorized in November.

The four-month tax holiday in New Mexico would cost an estimated $90 million, as city and county tax declines caused by the policy would be covered by the state.

Across New Mexico, the pandemic and restrictions enacted in response to it in an attempt to slow the spread of the virus have taken a toll on parts of the state's economy.

Although restaurants in most of the state's 33 counties have recently been allowed to reopen indoor dining at limited capacity due to reduced COVID-19 spread, many are still facing financial uncertainty.

Statewide, taxable gross receipts from the state's hospitality and food industries were down by more than $445 million — or 21.8% — over the previous year's levels through the first five months of the current budget year, according to state Taxation and Revenue Department data.

Third round of aid

The package of bills that have advanced at the Roundhouse represent the third round of targeted financial relief approved by state lawmakers since the COVID-19 pandemic hit New Mexico in March.

Legislators passed two relief packages last year — in June and November special sessions — that earmarked state and federal funds for expanded unemployment benefits, cash assistance and small-business grants, among other programs.

This year's package includes House Bill 11, which would authorize $200 million in small-business grants and has already cleared both the House and Senate.

It also includes measures, Senate Bill 2 and 3, that would pause liquor license fees for one year and overhaul a previously approved business loan program, respectively. Those measures are still awaiting final House approval.

Money to pay for the relief package — an estimated $400 million — would come from New Mexico's cash-flush reserves. There is an estimated $2.7 billion in those reserves.

Lujan Grisham has signaled support for the recovery bills, which would take effect immediately upon being signed as long as they pass both legislative chambers with at least a two-thirds majority vote.

Before winning House approval on Wednesday, the bill aimed at essential workers and restaurants passed the Senate 42-0.