The Roundhouse in Santa Fe (Photo by Peter St. Cyr)
Senate, House Democratic and Republican majorities failed to raise revenues in the legislative session. Instead, they voted to cut New Mexico’s colleges and universities by $47 million. They voted to cut K-12 public schools by $35 million. They voted to cut $111 million from paychecks of education employees and public workers by increasing retirement deductions.
“We can all be confident in knowing that by continuing to do our part, we’ll get through these tough times,” wrote Sen. Campos, Democrat of Las Vegas, in an ABQ Journal op-ed and an NMPolitics.net commentary. But the richest New Mexicans, who net $73,000 a year or more, aren’t doing their part.
Democrats and Republicans on the Senate Finance Committee would not allow the Senate to vote on whether the 2003 personal state income tax rates for the richest New Mexicans need to be restored.
In 2003, the Democratic and Republican majorities voted to cut state income tax rates from 8 percent to 4 percent for the richest New Mexicans (see this graph). These tax cuts cheat New Mexico’s universities, colleges, and K-12 schools out of $350 million a year in revenues. The cuts also help create state budget deficits.
No better time to raise revenue
“This is not a time to raise revenue,” wrote Sen. Campos. There is no better time for a Democratic majority to stand up for the 98 percent of New Mexicans who don’t benefit from the 2003 personal state income tax cuts. While the majority of New Mexicans pay about 10 percent of their income in taxes, the richest New Mexicans pay only 4.5 percent.
Democrats and Republicans on the Senate Finance Committee could have voted to send revenue-raising bills to the floor for a vote. Then, the Democratic majority in the Senate could have voted to send those bills on to Gov. Martinez, and put the monkey on her back.
Hurting in-state businesses
“Each dollar we cut hurts businesses,” wrote Sen. Campos. The Democratic and Republican majorities do hurt, and tax, in-state businesses. Perhaps their budget cuts hurt out-of-state corporations like Walmart, KASA2/KRQE TV13, and Yates Petroleum, too. But, they don’t tax the profits of these out-of-state corporations.
The Senate Rules Committee (Democratic Senators Phil Griego, George Muñoz, and John Sapien joined with Republicans) voted to kill Senate Bill 6. The bill would have closed tax loopholes used by out-of-state corporations to not pay state income taxes on profits made in the Land of Enchantment.
This tax loophole cheats New Mexico’s universities, colleges, and K-12 schools out of $100 million in revenues. This loophole also fails to create a level playing field for in-state businesses, which are required by lawmakers to pay income taxes on profits made in New Mexico.
High unemployment
“We have managed our way through this financial crisis,” wrote Sen. Campos. After three years of budget cuts by the Democratic and Republican majorities, the state has the highest number of unemployed New Mexicans since the 1940s.
If you have a public, taxpayer-supported job like Sen. Campos, who is president of a New Mexico community college, this is a recession. But, if you’re unemployed like too many New Mexicans, this is a depression.
Another year of budget cuts by the Democratic and Republican majorities may create even more unemployment in New Mexico.
Some aren’t tightening belts
“Virtually every New Mexican continues to tighten (their) belt,” wrote Sen. Campos. A minority of New Mexicans aren’t tightening their belts. The richest among us, about 2 percent of the 1.9 million people who live in New Mexico, benefit from the 2003 personal state income tax cuts. These same New Mexicans also benefit from the Bush 2001 personal federal income tax cuts.
Out-of-state corporations aren’t tightening their belts either. Walmart, Channel 2/13, and Yates Petroleum benefit by not paying corporate state income taxes on profits made in the Land of Enchantment.
Highly paid lobbyists
“The economy forced legislators to cut spending,” wrote Sen. Campos. No, it was highly paid lobbyists for the richest New Mexicans and out-of-state corporations who forced the Democratic majority to cut spending and not raise revenues. Those lobbyists didn’t have to force the Republican majority to support budget cuts.
House Republicans voted against the state budget because the cuts didn’t go deep enough. They said budget cuts were “too conservative.” Ironically, by cutting almost $200 million from the budget, the Democratic and Republican majorities not only reduced public spending for the fourth year in a row, they may also help prolong New Mexico’s economic recovery.
As a result, tax revenues may be down again next year, and lawmakers may be faced with more deficits.
“John Adams,” with Red Chili Revolution Productions, is a native New Mexican born in Roosevelt County. He works in the north. He is a public employee union member with 44 years teaching experience at university and secondary levels. For now, “John Adams” conceals his full identity due to retaliatory threats to “cease and desist” from using social media as a means for organizing, advocating and pressuring our state lawmakers to raise revenues. A prior version of this posting incorrectly linked to SB 7 instead of SB 6.