Lawmakers took a step Wednesday toward raising New Mexico’s minimum wage. Members of the House Labor and Economic Development committee voted 6-5 along party lines to advance a bill sponsored by Rep. Miguel Garcia, D-Albuquerque, that would increase the state minimum wage from $7.50 an hour to $10.10 over the next three years. Tipped employees would have to be paid at least 40 percent of the minimum wage, a boost from the $2.13 per hour they’re now paid. And starting in 2021, the minimum wage would be adjusted annually based on the cost of living. Business groups have fiercely opposed such legislation.
Legislators on opposing sides of the aisle are using remarkably similar arguments on two bills that would delay tax breaks and subsidies to businesses to help balance New Mexico’s projected $460 million shortfall between last year and this year. One would delay incoming corporate tax cuts for two years, saving the state an estimated $13.8 million this fiscal year, according to the Legislative Finance Committee,
The other bill would generate $20 million by cutting New Mexico’s film industry subsidy by that much this year. While both bills bear similarities in delaying tax breaks and subsidies for businesses, they’re being both supported and opposed on nearly opposite partisan lines. Democratic leadership in the Roundhouse argued that businesses must participate in the “shared sacrifice” of cuts to solve the state’s budget crisis when supporting the corporate tax cut delays that the Senate passed last weekend. House Minority Leader Brian Egolf, D-Santa Fe, emphasized this point when criticizing proposed cuts to services in the Republican budget plan Monday morning in his office.
Just three years ago, the New Mexico Legislature significantly changed what manufacturers owe in taxes in the state. Legislators squarely aimed the changes at one big company: Intel. Next year, the tax changes will fully eliminate payroll and property taxes for manufacturers and instead only tax them on their in-state sales. Related Story: After report of layoffs, Intel future in NM still unclear
Over the years, the computer microprocessing giant has enjoyed at least $2.6 billion worth of state and local subsidies for its facility in Rio Rancho. But the company also fell on hard times this decade as personal computers, which Intel’s microchip is used for, ceded ground to cell phones and mobile devices.
Economic headlines for New Mexico have rarely been good in recent months. In November and December, the state led the nation in highest unemployment rate. In January, New Mexico improved, but only to 49th. Stories abound of people moving out of the state to states with better economic climate. Which brings to mind the “r” word that everyone dreads when it comes to the economy: Recession.