New Mexico Economic Development and Revenue Strategy
The State Should Pursue Tax Policy Changes to Improve Equity, Reduce
Volatility, and Better Position New Mexico to Meet Future Needs
Broadening the GRT tax base. Broadening the GRT tax base can improve tax revenue
adequacy and stability by providing targeted tax relief to low-income earners while
returning hundreds of millions of dollars in lost revenue to the State.
Increasing the motor fuel tax rate. Increasing the motor fuel tax rate to align with
national trends (raising rates to adjust to long-term trends of increasing automobile fuel
efficiency) can support greater tax base adequacy.
♦ Continuing to expand excise taxes. The State should continue to align its excise taxes
with new forms of goods or services that gain traction in the market; the typical
regressivity of excise taxes can be offset by or coupled with a more progressive PIT.
© PFM
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