April 5, 2001

HOUSE EXECUTIVE MESSAGE NO. 75

The Honorable Ben Lujan and

Members of the House of Representatives

Executive-Legislative Building

Santa Fe, New Mexico 87503

Honorable Speaker and Members of the House:

I have this day VETOED and am returning HOUSE TAXATION AND REVENUE COMMITTEE SUBSTITUTE FOR HOUSE BILL 155, as amended with emergency clause and certificate of correction, enacted by the Forty-Fifth Legislature, First Session, 2001.

I previously indicated to the legislative leadership that I would veto the capital appropriation bill absent a personal income tax cut for all New Mexico citizens who pay income taxes. The tax cut that is needed is $36 million recurring in FY 2002 and $72 million recurring in 2003. I was willing to negotiate this phase-in; however, the tax cut bill that was passed and sent for signature did not meet the guidelines that I very clearly set out for the legislature at the beginning of the session. I am therefore keeping my promise to veto this legislation.

This veto of the capital projects bill will result in a 12 percent operating reserve balance at the end of FY 2002. In addition, the bonding capacity that would have been available for statewide capital projects will now be available for Public School Critical Capital Outlay. If this capacity is not used for such purposes in the near future, revenues from mineral production taxes may revert to the Severance Tax Permanent Fund. Given the recent significant declines in investment values, I believe this reversion is a viable option.

I am still hopeful that the legislature will enact a tax cut for all citizens. Given the billion dollars of new money that the state is projected to generate in the current and next fiscal year, we have an obligation to return some of this surplus to taxpayers.

Sincerely,

Gary E. Johnson

Governor

RECEIVED FROM THE OFFICE OF THE GOVERNOR:

Time: _____________________ By:_____________________________

Secretary of State

Date ______________________

Time:______________________

Date_______________________ By:_____________________________

Chief Clerk of the House

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