The tax hikes are coming fast and furious these days in the Land of (dis)Enchantment. During the 2017 legislative session, numerous tax hike bills were considered. Several passed. Gov. Martinez vetoed them, but with New Mexico’s budget facing an ongoing crisis, the likelihood of higher taxes – including a 10 cent/gallon gas tax hike – looms large. A special session has been called for May 24 and Democrats who control the Legislature can again be counted on to push very hard for higher taxes.
State lawmakers say revenues are no longer deteriorating but remain flat, and they are moving forward on a 2018 budget with proposals to infuse new revenue — including tax increases — to balance spending and replenish reserves. A new consensus revenue estimate for fiscal year 2018 was expected to be released Wednesday but was pulled back for more study. Still, lawmakers said they do not expect a significant change from December, when economists were forecasting a $125 million deficit for the 2018 fiscal year, which begins July 1. “I don’t believe there’s going to be a material change,” Sen. John Arthur Smith, D-Deming, told the Senate Finance Committee. A forecast presented halfway through last year’s legislative session showed state revenues cratering from the collapse of crude oil prices.
Moderately low gas prices and an increasingly dire budget situation in the state has lawmakers eyeing new sources for revenue. Gov. Susana Martinez has adamantly opposed any new or increased taxes, but some lawmakers are looking to grab several more cents from drivers at the gas pump. At least two state senators and one Albuquerque city councilor have introduced legislation to increase gas taxes to help pay for road repairs and infrastructure. The move appears to be a trend in several other states. New Mexico state Sen. John Arthur Smith, D-Deming, chairs the Senate Finance Committee and is considered one of the most fiscally conservative Democrats in Santa Fe.
Voters in Bernalillo County get to vote on a question regarding Albuquerque’s controversial rapid transit project—but the results will have little to no effect on the project itself. The ballot question asks voters if they are in favor of putting the controversial Albuquerque Rapid Transit (ART) project to a vote in future elections. Even if the majority of voters in the county are in favor of voting on ART, the Albuquerque City Council would not be required to add the proposal to any future ballots. The actual question asks voters, “Are you in favor of giving voters residing in the City of Albuquerque municipal limits the chance to vote in support of or opposition to the proposed Albuquerque Rapid Transit project?”
Even if the question receives a resounding ‘yes’ when results come in next week, there is nothing on the ballot that can stop the project from moving forward. The question’s sponsor County Commissioner Debbie O’Malley said she wanted to send a message to Albuquerque Mayor Berry on behalf of business owners who still oppose the project.
New Mexicans are desperate for some good economic news (see the grasping for straws over the Facebook “success”). Paul Gessing is the president of New Mexico’s Rio Grande Foundation, a libertarian-oriented think tank based in New Mexico. Unfortunately, the path forward involves making hard and politically-difficult moves that involve standing up to special interest groups whether they be the unions, the film industry, or business advocates for more “corporate welfare” like LEDA and JTIP (to name just a few). Unfortunately, the free market path to reform isn’t going to be the first choice of a Council stocked with dozens of politicians and interest group representatives. So, according to today’s Albuquerque Journal, here is what they came up with followed by a brief statement added by the author:
Expanding broadband access: This CAN be done by removing regulatory barriers, but we know they are really looking for tax dollars (that we don’t have);
Marketing New Mexico to retirees: An obvious idea because retirees don’t NEED jobs and New Mexico has nice weather.
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.
Sometimes it seems that New Mexico’s economic-development cheerleaders live in an alternate reality. We all want New Mexico to be prosperous and wealthy, but anyone who believes that the state’s economy is doing well these days is simply not paying attention. Paul Gessing is the president of New Mexico’s Rio Grande Foundation, a libertarian-oriented think tank based in New Mexico. Gary Tonjes of Albuquerque Economic Development, writing in the Albuquerque Journal, touted New Mexico’s “business-friendly” environment, including corporate-welfare programs like LEDA and JTIP and their role in attracting business. He says that the Facebook win “sends a message to other employers that this is a great place for business.”
Unfortunately, the reality is far different:
As of August, New Mexico’s 6.6 percent unemployment rate is the second highest in the nation;
From 2004 to 2015, during the era of the “High Wages Jobs Tax Credit,” real median hourly earnings in New Mexico grew by less than a quarter;
According to Forbes’s “Best States for Business” 2016 report, neighboring Utah, Colorado, and Texas rank 1st, 5th, and 6th, respectively, while New Mexico is 47th;
James Spiller recently wrote a scathing article in the National Review in which he argues that the record of former New Mexico governor and current Libertarian candidate for president Gary Johnson is “not conservative and not even all that libertarian.” Paul Gessing is the president of New Mexico’s Rio Grande Foundation, a libertarian-oriented think tank based in New Mexico. As the head of New Mexico’s free-market think tank (although I was in Washington, not New Mexico, during the Johnson administration,) I’d like to offer my own thoughts on Johnson’s tenure. I’d also like to refute some of what Mr. Spiller has to say in his critique. Spiller starts by attacking Johnson’s fiscal record, claiming that he is a “big spender” compared with successors Richardson (a Democrat) and Martinez (a Republican). One problem is that Spiller “credits” Johnson with spending money he had little control over.
New Mexico’s Democratic and Republican candidates are readying for a primary election in less than a month. They have been canvassing neighborhoods and raising money for weeks. But they might not be the only candidates in the ballot come November. Candidates who are members of minor parties or are independent and not part of any political party cannot file to run until almost two months after their major party counterparts. Robert Bridgwater, the former chairman of the Independent American Party for New Mexico, told NM Political Report that minor parties in New Mexico face an uphill battle during election season.
A controversial bill that took many hours of debate last year saw an accelerated but long and heated debate before dying this time. Five Democrats in Senate Public Affairs Committee voted to table what supporters call “right-to-work” legislation Tuesday evening, overriding the four Republicans who voted to keep the bill alive. The bill would have barred “fair share” union payments, which can be required in some jobs for nonunion employees who work in a collective bargaining unit. Unlike union dues, fair share fees pay for the negotiating a union does on the collective bargaining unit’s behalf. Brian Condit, a political coordinator for the International Brotherhood of Electrical Workers, testified that fair share fees can’t include “nonchargeable” union activities like organizing, political activity and union education.