Editorial: House Bill 11 Will Hurt State

Submitted by the Nm Chamber Association

House Bill 11: One of the Largest Tax Increases in New Mexico’s History

The New Mexico Chamber Association supports policies that drive economic growth, job creation, and business competitiveness. However, House Bill 11 (HB 11), the proposed Paid Family and Medical Leave (PFML) program, represents one of the largest tax increases in New Mexico’s history, placing a heavy financial burden on workers, businesses, and public institutions statewide.

HB 11 imposes a $450 million tax on working New Mexicans, increasing to $545 million by 2031.

For the first time, every employee in New Mexico will be required to pay a payroll tax, reducing their net wages. This mandatory tax impacts all workers, regardless of whether they use the benefit.

Higher Taxes for Businesses, Schools, and Local Governments

Beyond private businesses, every school district, college, university, municipality, and county will have to raise taxes to cover their portion of this costly program. These public institutions, already managing tight budgets, will have no choice but to pass these costs onto taxpayers through higher property taxes, sales taxes, or budget cuts.

Small businesses—many still recovering from the pandemic and natural disasters—will be hit hardest. With rising costs and workforce challenges, this new mandate could force layoffs, wage reductions, or even closures. Instead of supporting economic recovery, HB 11 creates additional financial hurdles for job creators.

A Permanent Payroll Tax on Workers

For the first time in state history, every worker will have to pay into a state-run payroll tax program, reducing their take-home pay. While proponents claim this program provides essential benefits, the reality is that employees will see immediate paycheck reductions, while the system’s long-term financial stability remains unproven.

Unlike Social Security or unemployment insurance, which are federally managed, this program will be entirely state-run, costing over $22 million annually just to administer. If funding shortfalls arise, the state will have to raise taxes again to keep the program solvent—further increasing costs for businesses and workers alike.

New Mexico Cannot Afford HB 11

New Mexico should be prioritizing job growth, workforce development, and economic competitiveness. Instead, HB 11 mandates a costly, one-size-fits-all approach that forces businesses, workers, and taxpayers to foot the bill. Instead of creating new taxes, policymakers should explore voluntary programs, private sector solutions, and tax incentives to expand paid leave benefits without jeopardizing jobs and economic stability.

Call to Action: Stop HB 11

HB 11 raises taxes on every worker and employer in the state, reduces wages, and forces local governments to increase taxes to comply. This is one of the largest tax increases in New Mexico’s history, and we cannot afford it.

We urge all New Mexicans to contact their local legislators today and

Tell them to vote NO on HB 11. Tell them to support policies that strengthen our economy, not weaken it.

Act now to protect jobs, wages, and New Mexico’s economic future.

For more information and to find your legislator, visit www.workingfamiliesnm.com.

Submission endorsed by the Carlsbad Chamber of Commerce.