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Thursday, March 04, 2010

NM Legislature Passes Budget and Tax Package Bills, Session Should End Today

We're almost at the end of the dismal and disturbing special session of the New Mexico Legislature. Yesterday, the House passed the Senate's omnibus tax bill, CS for SB 10, 12, 13, by a margin of 38-28 after about three hours of debate on the House floor. Five Democratic Representatives voted no: Joe Campos (Santa Rosa), Karen Giannini (Albuquerque 30), Ben Rodefer (Corrales), Debbie Rodella (Espanola) and Jeff Steinborn (Las Cruces 37). One Republican voted yes: Jeannette Wallace of Los Alamos. Three Democrats were excused -- Nate Cote (Las Cruces 53), Moe Maestas (Albuquerque 16) and Sandra Jeff (Crownpoint), along with one Republican --Nora Espinoza (Roswell) -- who has been out of the country for the entire special session.

Before the vote, Republicans forced a "call of the House" that required the chamber's doors to be locked and missing members who had not been excused to be sought out by state police to force their return to the House floor. High drama in the Roundhouse.

It's estimated the taxes in the omnibus bill will raise about $200 million in revenues next fiscal year. The package passed the Senate on Tuesday, by a margin of 25-15.

Painful Process
There was a lot of complaining by Republicans yesterday because the House leadership decided to bypass a hearing for the tax bill in the House Revenue and Taxation Committee (HRTC) and bring it directly to the floor. Clearly, there was some fear on the part of the Dem leadership that the tax measure wouldn't pass in the committee because its membership includes Reps. Ben Rodefer, Sandra Jeff, Andrew Barreras and Nate Cote, who were known to have misgivings about it. Barreras ended up voting for the bill on the House floor, but the others either voted no or were excused.

House Dems had been warned by Sen. John Arthur Smith not to tamper with anything in the tax package -- especially the food tax -- or the compromise deal would fall apart and necessitate another special session, probably in May. Smith, who some are calling the Food Tax King, held up the House budget bill, HB 2, from coming to the Senate floor until the tax package was approved in the House.

There had reportedly been a lot of talk in the House of either altering or eliminating the food tax, but threats by leadership in both Houses (and, no doubt, maneuvering by the Governor) apparently worked well enough to stop any of that from happening. In the end, almost all of the House Dems fell into line rather than attempting to fight to improve the Senate version of the tax bill as some progressive Senators had hoped. I'm sure it was a fight just to get the House leadership to accept the Senate's improvements on the original deal.

Suffice it to say that many Dems weren't enthusiastic about voting for the final tax package, but they had little ability to change it given the narrow parameters set by Governor Bill Richardson and the Dem leadership in both chambers on what kinds of taxes would be ruled germane. And it was clear that if anything was altered, Sen. John Arthur Smith et al. would stop the budget cold and make everyone come back in a couple months to start all over.

Still, I found it very painful to listen to the House debate yesterday, having to endure hearing GOP members go on and on about how much the food tax -- which will average about 2% depending on the municipality -- will hurt ordinary New Mexicans. And to witness Dems stepping up to defend a tax that is still regressive, even if it's better than the one in the original deal, and $5 million has been added as a buffer to increase tax rebates for low-income citizens. Of course, the GOP solution would be to cut education, government services and Medicaid to the bone, not apply a high-earner surcharge or tax big-box corporations like local small businesses are taxed. As is often the case, their melodramatic expressions of concern about workers and the poor were shallow and expedient, at best.

After the tax package passed the House, the Senate convened to vote on HB 2. The budget bill detailing about $5.6 billion in spending was then approved on a party-line vote by a margin of 26-14.

Still to Go
Still to be voted on today is HB 3, the 75 cents a pack cigarette tax passed by the House as amended to earmark about a third of the taxes collected to education. It passed the Senate Finance Committee 7-2 today, but was amended so it will have to go back to the House for concurrence if it passes the Senate. The bill is expected to raise about $33 million in revenue.

According to Matt Reichbach on today's NMI live blog, "The bill as a whole has a four year sunset (added in the House) -- the 25¢ "earmark" for public education will now sunset after one year. Also, 12.5¢ will go towards both early childhood education and higher education (for a total of another 25¢). And one word was added ("or") somewhere in the bill to make protections against people buying cigarettes on tribal lands and reselling them off tribal lands stronger."

I know it's considered politically incorrect to say it, but I think it's bad government to make smokers pay extra for education. You'd think New Mexicans as a whole would be expected to support education through any taxes levied to pay for it. Smokers are already paying extra taxes supporting the expansion of SCHIP to provide health care coverage for more children. However, lawmakers love the cigarette tax because only a minority of smokers can be expected to complain about it and they can feel good about punishing the "smoking sinners" and ostensibly stopping teens from taking up the habit -- at least poor teens.

Notice that liquor, wealthy income, capital gains and big-box corporations were spared this session, except for higher taxes for those itemizing their deductions. Priorities, priorities.

Also still pending in the Senate is a vote on a number of capital projects around the state in the form of so-called GO bonds.

March 4, 2010 at 11:53 AM in Economy, Populism, Education, Food and Drink, Gov. Bill Richardson, NM Legislature Special Session 2010, Taxes | Permalink


Bah! Progressive my ass.

Posted by: Robert | Mar 4, 2010 5:25:17 PM

The progressives in the party should confront some of these Senators at the upcomming convention on their votes and the bills that they sponsered during this session. We need to publicly hold them accountable at the convention for screwing the New Mexico working and middle class. All of our elected Democratic officals need to be reminded that they are only public servants that work for the voters.
This is off the subject, but I have mention it. The Journal had an article about our Secretary of State on corruption, and KRQE recently had a story about her putting her family photos in the Blue Book. She told the legislature that she doesn't have enough money for the Nov. 2010 election, yet she went to India and Turkey on our tax payers dollars. She screwed up numerous electons in the past. I really wish that Maggie
Toulose Oliver was running for that office this year, because she is the best county clerk we have ever had. I can't bring myself to vote or support Herrera.

Posted by: Kay | Mar 5, 2010 8:18:51 AM

Kay, most of these senators don't go to party functions like next week's convention. They are not loyal to the party at all but to connected interests.

Posted by: SCC in Albq. | Mar 5, 2010 8:55:38 AM