The Legislative Finance Committee held its September meeting at Spaceport America, surrounded by cattle ranches and seemingly endless expanses of mesquite. On Thursday afternoon, legislators were updated on an issue that doesn’t involve rockets or space travel—but is critically important to the state’s future: the Texas v. New Mexico lawsuit in the lower Rio Grande. In 2013, Texas sued New Mexico and Colorado in the U.S. Supreme Court, alleging that New Mexico was taking water that legally should flow to Texas under the terms of the 1938 Rio Grande Compact by allowing farmers to pump groundwater connected to the river. Were the Supreme Court to side with Texas, it could force some southern New Mexico chile, pecan and cotton farmers to stop pumping groundwater. Or, the state could even wind up paying Texas up to $1 billion in damages.
New Mexico legislators are seeking to overhaul a key part of the state’s tax code in next year’s legislative session, but doing so will be difficult.
That’s according to members of the New Mexico Legislature’s interim Revenue Stabilization and Tax Policy Committee after they heard a presentation from state experts on tax reform efforts and an update on an independent study on tax reform in the state. Legislators have been looking at reforming the state’s Gross Receipts Tax, a key source of revenue. Earlier this year, the state hired Ernst & Young, in partnership with Georgia State University, to take a look at how changing the state’s GRT might affect revenue. Legislative Finance Committee analyst Jon Clark said analysts will examine a tax reform effort sponsored during this year’s special legislative session by Rep. Jason Harper, R-Rio Rancho. Harper took a crack at tax reform when he introduced House Bill 8, a massive 400-page bill which would have lowered the gross receipts tax while eliminating most deductions.
If it had passed in its original form, the tax overhaul supported by the governor and legislative Republicans during the recent special session would have hurt the state. That’s the news from the finalized fiscal impact analysis done by staffers with the Legislative Finance Committee, first flagged by the Albuquerque Journal. According to the analysis, a technical error on the part of the bill’s drafters threw off revenue estimates by more than $100 million. The error had to do with the repeal of a nonprofit receipts exemption that applies to nonprofit organizations, including hospitals. The bill itself was finalized shortly before the special session began and was introduced hours after the special session came to order.
The latest New Mexico revenue projections appear to be convincing economists and state officials there is enough money to finance state government through June without resorting to government furloughs. “Based on the projections we see, yes, I think there are adequate funds,” Deputy state Treasurer Sam Collins told NM Political Report. New Mexico State University economics professor Jim Peach recently gave the Santa Fe New Mexican a similar answer. But Gov. Susana Martinez, who has been threatening furloughs for a month, had a different take. Martinez spokesman Michael Lonergan warned that the state still may not have enough cash on hand to avoid furloughs and is calling on the state Legislature to fix this in a special session.
State budget troubles are prompting the New Mexico Higher Education Department to make cuts to a program local students use to attend colleges in nearby states for programs not offered at home. New Mexico pays into the Western Interstate Commission on Higher Education (WICHE) Professional Student Exchange Program that allows local students to go to dentistry and veterinary schools outside of the state at a reduced rate. To qualify for the loan for service, students must sign a declaration of intent to return to and work in New Mexico once they finish school. Currently, 67 students from New Mexico benefit from the WICHE exchange program. By next fall, that number will drop by six students.
Spaceport America, which has generated plenty of controversy because of the tax subsidies it receives, now says its success depends on less public scrutiny. The Senate Public Affairs Committee obliged Friday, backing a bill to exclude many spaceport business dealings from the state’s public records law. Its members voted 5-2 to allow the spaceport to withhold information about clients in the space business. Sens. Jeff Steinborn, D-Las Cruces, and Liz Stefanics, D-Cerrillos, dissented.
The House on Thursday rejected a two-and-a-half-year moratorium on licensing new charter schools in New Mexico. Thirty-four House members voted to pass House Bill 46, which would have prohibited a chartering authority — the state or a local school district — from accepting or approving any new applications until Jan. 1, 2020. But 34 representatives also voted against it. In a tie vote, a bill fails.
What began as a bipartisan compromise bill to ban people from openly carrying guns in the state Capitol is now bogged down in the Senate and at risk of being defeated. Senate Bill 337 would restrict possession of guns in the Capitol to police officers and people with a license to carry a concealed firearm. Sponsored by Sens. Bill Sharer, R-Farmington, and Daniel Ivey-Soto, D-Albuquerque, the bill cleared two Senate committees after being pitched as a way to balance the rights of law-abiding people who want to arm themselves and the impact on visitors to the Capitol who said they were intimidated by others openly carrying firearms, including long guns. The bill has been on the legislative calendar for a vote by the full, 42-member Senate for a week.
Financial bonuses for state lottery officials and contractors would be tied to increases in scholarship money available to New Mexico college students under a bill that got unanimous bipartisan approval from a House committee Monday. House Bill 250, sponsored by Rep. Jason Harper, R-Rio Rancho, also would require the state lottery to transfer money from unclaimed cash prizes — usually $2 million to $4 million a year — to the lottery scholarships fund. In addition, the bill would halt a pilot program launched last year in which lottery tickets are sold at self-serve gasoline pumps. Lottery officials launched the program at 13 gas stations — and 100 gas pumps — around the state, despite the fact that a House committee in 2015 killed legislation sought by lottery officials that would have legalized gas pump lottery ticket sales. HB 250 would prohibit all video lottery games connected with fuel pumps or automatic teller machines.
Storefront lenders would be limited to charging interest rates of 175 percent under a bill that cleared a Senate committee Monday, but consumer groups called the measure inadequate. The bill sponsor, Sen. Clemente Sanchez, D-Grants, said his plan would stop interest rates of 300, 500 or even 700 percent that have led to dozens of futile attempts by legislators to regulate an industry that critics say preys on the downtrodden. “It will eliminate the high interest rate loans we have heard about for years,” Sanchez told the Senate Corporations and Transportation Committee, which unanimously advanced his proposal, Senate Bill 388. The committee, which Sanchez chairs, rejected reforms backed by a coalition of consumer advocates. Then it embraced Sanchez’s proposal, supported by many in the storefront lending industry, to cap interest rates for short term-loans and effectively ban payday loans.