Skip directly to content

Chandler: Editorial Shows Short-Term Thinking

on March 11, 2019 - 4:43pm

By Rep. Christine Chandler (D-Los Alamos)

As a freshman legislator, I surprised many people by asking to sit on the House Taxation and Revenue Committee. Few people think that such subjects are interesting, let alone desirable. I disagree. They are at the heart of how our state government functions.

One of our primary jobs as legislators is to ensure that the state can provide the services and infrastructure – education, roads and highways, public safety, and more – that are needed and relied upon by our businesses, families, and communities. It’s the Legislature’s job to craft the budgets that not only cover those needs in the here and now, but that ensure they are with us into the future.

We can’t do any of this without revenue and, if we are to have a smooth path forward, that revenue must be adequate, reliable, and gathered in a way that is equitable to all tax payers. Thanks to the trickle-down thinking of the past 15 years, New Mexico’s tax system has failed all three of these criteria. And we don’t even have new jobs and a strong economy to show for it.

This year, we’ve been fortunate to receive higher levels of revenue than usual from the oil and gas industries. While that’s great for this year, we can’t count on having more years of extra revenue from what is a very volatile industry. We need to ensure that we have more stable and diversified revenue streams.

This is one reason I’m a proud supporter of House Bill 6, the Invest in New Mexico Act. Not only will it help us break free of the boom-and-bust cycle that is endemic to relying so heavily on one industry, it will also make our tax system more fair for our hard-working families.

The Albuquerque Journal disagrees. In their March 5th editorial they denounced House Bill 6 as unnecessary given the current revenue outlook. But they’re only thinking in the short-term. We can’t afford to legislate for the short-term if we are to put New Mexico on the road to a stronger economy.

Our revenue estimators are forecasting an extra $1.1 billion this year, most of it due to high gasoline prices. This is an estimate, not money in the bank. As recently as fiscal year 2017, all mineral revenue combined came in at less than $800 million. In FY10, during the midst of the recession, it was less than $700 million. That’s a $400 million difference. Seen in that light, House Bill 6 – which raises just over $300 million – looks downright conservative.

House Bill 6 also addresses some of the equity problems in our tax system by increasing tax credits for working families earning low incomes and fixing the blunder in the federal tax reform that penalizes families with children.

Asides from leaving out these details of the bill, they did however choose to include something that was simply wrong. Their egregious error was on the vehicle excise tax. Even with the slight increase in House Bill 6, New Mexico’s excise tax on cars will still be lower than it is in most of our neighboring states. Clearly they were not listening when one of my colleagues read out the rates in nearby states on the House floor. Their notion that New Mexicans will go out-of-state to purchase their cars is entirely false – unless those people intend on paying higher taxes.

The fact is, neither people nor businesses move from state to state looking for the lowest tax rates. A far more important concern is the quality of life. This includes factors like the quality of education, access to recreation and entertainment, and crime levels. For businesses it includes the quality of the workforce and the infrastructure to move goods. We can improve these quality-of-life factors – but not without stable, adequate revenue.


Advertisements