Delaying tax issue costs NM jobs, income

Legislative Democrats are champing at the bit to raise revenue, and one way to do it is to remove exemptions to the state’s dysfunctional and burdensome gross receipts tax system.

Meanwhile, Republican Gov. Susana Martinez campaigned on a pledge of no tax increases and isn’t about to go back on her word to New Mexicans. But she would agree to remove some of those same exemptions if it is done in the context of a tax reform legislation.

Rep. Jason Harper, R-Rio Rancho, is willing to once again pour his heart, soul and expertise into crafting something that accomplishes this.

Unfortunately, it already appears DOA. Again.

Last time we saw this horror movie, legislators wanted a study of the state’s tax system so they could deal with unintended consequences of Harper’s N.M. Tax Reform 1.0 — legislation virtually everyone agreed had merit. That $400,000 study, complete with computer modeling on the effects of any changes — is supposed to be ready this month, ahead of the upcoming 30-day session dedicated primarily to the budget.

Not good enough.

Speaker Brian Egolf, D-Santa Fe, says a “stem-to-stern” rewrite of the tax code would be difficult to do in a 30-day session. More realistic, he said, is removing some exemptions in the gross receipts system, taking steps to address pyramiding of business taxes and closing certain loopholes to generate new revenue.

But doing it ad hoc and selectively most likely equates to a tax increase the governor won’t sign.

While Egolf says he is “absolutely committed” to changing our tax code, Harper says the Democrat-controlled Legislature doesn’t want to “give the governor a win in her last session, which is disappointing.”

Disappointing indeed, because delay only prolongs our state’s economic malaise. But who needs economic vitality and jobs when we can continue to try to divvy up the pie in a state with the second-to-worst unemployment rate in the nation? Where 43 percent of the population is on Medicaid? And one in four residents is on food stamps?

Harper says he is hopeful the Legislature will consider and pass at least a scaled-down version of his tax overhaul plan.

“We can’t go another year without making some changes to improve the economic climate here,” he said.

He states the obvious.

Taxpayers should demand that legislative leadership come to grips with this issue. They wanted a study, and now they have it.

Refusing to do anything with it is just playing politics at the public’s expense.

— Albuquerque Journal