If the state of New Mexico wants to get back on solid financial footing it has to take on some sacred cows, according to Sen. Ron Griggs.
Griggs, a Republican who is the former mayor of Alamogordo, calls the omnibus tax bill he is sponsoring the start of that conversation. The bill not only brings back the gross receipts tax on food and medicine — albeit at a lower rate — but it raises the fee to transfer ownership of a motor vehicle and imposes a new fee to transfer or refinance real estate.
Senate Bill 343 would also reduce the corporate income tax, eliminate taxes on interest income, which would benefit retirees over 55, and help cities and counties with their budget challenges.
Large, complicated tax measures have not always fared well in the Legislature. The last one that was approved, in 2013, is still criticized because it has cost the state more than anticipated from granting corporate tax breaks.
Griggs said his bill would not raise taxes long term. The bill has not yet been analyzed to quantify its costs.
Griggs is not known as a tax expert and doesn’t serve on any of the committees that might hear the bill, but he said that shouldn’t stop others from considering the ideas. Other lawmakers have different tax bills moving through the Legislature, and most are more specific.
“What becomes important is to put the ideas out there,” Griggs said at a Monday news conference.
He said the measures would put the state on more stable footing and make it less reliant on revenue from oil and gas sales and production. It would also make New Mexico competitive with its neighbors in attracting retirees and business owners looking to relocate, he said.
“This bill eliminates interest income and dividend income from personal income tax for anyone over the age of 55,” he said. “This could help many in our state and it could help attract snowbirds to New Mexico.”
In addition, the bill would eliminate reimbursements to cities and counties under a promised agreement adopted when the state dropped the gross receipts tax on food and medicine. In exchange, it would re-impose that tax at a statewide rate of 3.75 percent on food and 2 percent on medical services, allowing local governments to keep the entire amount. Low-income residents would see an increase in the working families tax credit to offset some of their tax payments on food.
Moreover, it would reduce the corporate income tax rate to 3 percent from what is now the lowest rate of 4.8 percent.
The bill heads to the Senate Corporations and Transportation Committee and then Senate Finance.
Contact Bruce Krasnow at 505-986-3034 or [email protected]