April 27, 2017

Martinez wants Legislature to take on tax reform in special session

Andy Lyman

Gov. Susana Martinez still hasn’t set a date for a special session, but just put another big item on the plate for the Legislature.

Martinez said Thursday in addition to fixing the state budget, she wants legislators to act on tax reform. Currently, the budget has no money for higher education or the Legislature for the fiscal year beginning July 1 due to the governor’s line-item vetoes.

According to the Albuquerque Journal, Martinez described an overhaul of the state’s tax code as “both a short-term and a long-term solution.”

Martinez announced the effort at the annual New Mexico Tax Research Institute Policy Conference in Albuquerque.

Martinez has called for a quick special session in the past, saying she hopes legislators can come together in agreement before legislators convene. Special sessions are projected to cost $50,000 per day.

Calls to overhaul the tax reform are nothing new. Legislators have looked at doing so for years, but debates on which exemptions should remain—if any— have largely bogged down the process.

This year, a tax reform effort went further than past efforts—the bill cleared the House unanimously but then failed to pass the Senate last year. The effort, led by state Rep. Jason Harper, R-Rio Rancho, would have eliminated more than 100 tax deductions and credits related to the gross receipts tax while cutting that rate from over 5 percent to under 3.5 percent.

According to the Journal Harper is working with Democrats on a proposal.

The plan is for the massive overhaul to be revenue-neutral.

In addition to line-item vetoing the higher education and Legislature’s budgets, Martinez vetoed a tax package that would have increased some taxes, including creating an internet sales tax.