Bob Cornelius
As our state Legislature convenes in Santa Fe, many legislators have offered proposals to raise revenue for our budget deficit by raising taxes on the poor through increasing taxes on food. We’ve also seen proposals to tax the “rich” by raising income taxes. There’s even talk of raising our gross receipts tax on business.
I am amazed that our elected officials would even consider raising taxes during a time of recession in our state.
What the Richardson-Denish administration and the Democrat-led State Legislature fail to see is that higher taxes won’t create more revenue; they will create less. If they raise the tax on food, people will shop less and go hungry more often. If they raise income taxes, people will move out of the state and look for a new job. If they raise the gross receipts tax, businesses will have to find ways to make up the financial hit, and that usually means they will lay off some employees or take their company and their jobs to a state that is more business-friendly.
According to a report from the Department of Workforce Solutions, New Mexico lost more than 43,000 jobs in 2009. We can’t afford to lose more jobs by raising taxes.
Instead, create jobs
The easiest way to raise revenue is to create jobs. More jobs mean more people paying income taxes, people buying more food, and more businesses doing more work that increases the state’s revenue from the gross receipts tax. The most likely place for new jobs to be created is in the area of energy – both traditional forms like oil and natural gas and by creating a new energy economy to include wind, solar, clean coal, biogas, hydro and eventually nuclear.
Unfortunately for New Mexico, the same Legislature that wants to raise your taxes has also created overly burdensome regulations on energy that have contributed to the 43,000 jobs lost – and will continue to cause more people to lose their job if steps are not taken to ratify the situation.
Instead of raising your taxes, the Legislature needs to take a look at revising the “pit rule” policy created by the Oil Conservation Division. This policy is not law, but it has effectively killed thousands of jobs in the oil, natural gas and mining industries.
This rule adds an additional $150,000-$250,000 to the price of every well a company drills, depending on where in the state the company drills. If we eased the regulation, a company could spend that $250,000 to create eight jobs that pay more than $15 an hour. That is just for drilling one well.
Ideally, these companies could hire more people and do more energy exploration. The company would pay more gross receipts taxes, the new employees would pay income taxes and could afford to buy more food for their families. The tax revenue created would help the budget crisis and, with oil and natural gas prices recovering, a percentage of the revenue from the minerals would go into the Land Grant Permanent Fund, which funds Pre-K through 12th grade education and our colleges in New Mexico.
Identifying ‘green job zones’
Along with the revised regulations, I am proposing that the state land commissioner work with climatologists and geologists to locate ideal areas for the creation of “green job zones.” These studies would allow us to target areas of state land where renewables like solar and wind could produce the most energy.
With the proposed Tres Amigas power plant outside of Clovis connecting major electrical grids, and the Legislature’s mandate that local utility companies use 20 percent renewable energy to create electricity, there is an already made market demand for renewable energy businesses to come in, create thousands of jobs and produce billions of dollars of new revenue for this state.
This could all be accomplished in this 30-day session of the Legislature. Instead of arguing over which taxes to raise and on whom taxes will be raised, the Legislature could be working to foster a climate for job growth and real revenue enhancements. We can solve this budget crisis by being proactive and taking a new way forward, instead of trying the old, failed policies of the past.
The plan is simple: More energy, more jobs, more revenue.
Cornelius is a Republican candidate for land commissioner.