The cost of owning a car in New Mexico would go up when you buy a new car or register a vehicle under two bills pending in the state House of Representatives.
Republicans and at least one auto dealer oppose a measure (HB649) that would raise the excise tax on vehicles from 3 percent to 4 percent of the value of the car. Excise taxes are only charged on new cars.
That proposal, and a separate one (HB636) to tack a surcharge on vehicle registration, could be heard Monday by the House Taxation and Revenue Committee.
Rep. Bobby Gonzales, D-Taos, is carrying the excise tax measure. He said most of the money would go to public transportation, including buses and the Rail Runner Express commuter trains.
Don Chalmers, who owns dealerships in Albuquerque and Santa Fe, said now is not the time for an increase.
“They (auto dealers) are hurting right now in a way that in my 35 years we’ve never hurt like this before,” he said. “It’s not sustainable.”
Raising the tax by 1 percentage point would generate $40 million in revenue in the 2010 fiscal year, according to an analysis of the measure.
Most of the money, 60 percent, would go to public-transportation providers in regional transit districts or qualifying areas where those districts are not set up. About 15 percent would go to park-and-ride programs, while another roughly 15 percent would go specifically to the Rio Metro Regional Transit District for commuter rail services. Ten percent of the money would go to special-needs transportation for the elderly and disabled passengers.
Gonzales said Thursday he’s sensitive to the concerns about the increase and is considering reducing it.
Rep. James Strickler, R-Farmington, said he’s against the idea.
“A tax increase for motor vehicle registrations is poorly timed when so many people are losing their jobs, especially in the oil and gas industry,” he said.
“We have a wonderful opportunity to prioritize our spending and cut spending to free up funds to maintain our highways,” Strickler said.
The surcharge measure would add additional charges to motor-vehicle registrations ranging from $15 to $400 depending on the size of the vehicle.
A car that weighs less than 2,000 pounds, for example, would be subject to a $15 surcharge while trucks, truck tractors and buses that weigh more than 48,001 would be subject to a $400 surcharge.
An analysis of the bill says it would result in “a total revenue increase of $104.4 million in FY 2010 due to a registration surcharge.”
Ninety percent of the surcharge would to the State Road Fund to maintain state highways while 10 percent would go to a new State Transit Fund. That fund would go to public transit agencies in rural areas and in cities “that are within another states’ urbanized area,” according to an analysis of the measure.
The Taxation and Revenue Department is not supporting the measure, a spokesman said.
Contact Kate Nash at 986-3036 or email@example.com.