As New Mexico legislators draft a state budget amidst the current economic climate, they are looking for areas to cut and enact taxes. Legislators should take a second look at the current tax structure. In my opinion, the current system is unfair to both citizens and the state’s ability to raise much needed revenue.
For instance, New Mexico lawmakers need to refigure ways to provide additional revenue for the New Mexico Department of Transportation (NMDOT). According to one elected official,7 nearly $400 million in additional revenue could be generated by closing the gas-tax loophole.
This includes a 4-to-1 match from the federal government totaling over $300 million. This tax loophole allows for Native American lands to be exempted from taxes on gasoline.
Many New Mexicans are unaware of the potential tax revenue that could be generated through taxation of gasoline purchased on Native American reservation lands. These products have been tax-exempt since 1992, as the intention was to provide economic development through tax exemption.
However, that incentive is no longer needed, thanks in part to the casino revenues that are boosting the economies of many Native American pueblos and tribes.
The issue, as I view it, is that non-natives are benefitting from the tax exemption, or loophole, whichever you prefer. I feel as though all New Mexicans and tourists who are utilizing our roadways and thoroughfares should be supporting the construction and maintenance of those roadways.
It is, I believe, imperative that our elected representatives, as well as the general public, recognize the seriousness of the situation and the enormous loss of revenue, which New Mexico is feeling, as a result.
It is not now, nor has it ever been an issue of sovereignty. I have no issue with tribal sovereignty. I have no issue with Native Americans being able to purchase and consume, for their own benefit, gasoline free of excise taxes – only non-Natives.
While I support Native American rights as sovereign nations, I am certain that a large majority of consumers at stations are not of Native American ancestry. Those same consumers drive on New Mexico roads day after day. These roads need constant maintenance and improvement.
Without tax dollars to contribute to the transportation fund, our roads will sink into further disrepair. The NMDOT does not receive money from the general fund and relies on the excise taxes to complete and maintain road construction projects.
Road construction projects create thousands of jobs every year in the state of New Mexico. A lack of revenue will bring another threat – job loss. Most people don’t need to be reminded of the current economic situation and the high rate of unemployment. But this is a growing concern that could affect or financially strap the state very soon.
While it is neither the desire, nor the intent, to interfere with tribal activities, an equitable solution is required to boost much needed revenue for our highways, to ensure safety for all drivers and bring additional jobs to the state.
Baca is state executive for the New Mexico Petroleum Marketers Association.