An unexpected flurry of last-minute tax legislation turned this year’s New Mexico’s Legislature into a good session for business, leaders of three major business groups said Monday.
“It was the best session for business I believe that I have ever witnessed, and I’ve witnessed a lot of them,” said Greater Albuquerque Chamber of Commerce CEO Terri Cole.
“In spite of all the noise, we’re really pleased with the leadership demonstrated by (Gov. Susana Martinez) and by (Senate Majority Leader) Michael Sanchez, (House Speaker) Kenny Martinez and others,” said Alex O. Romero, Albuquerque Hispano Chamber of Commerce CEO. “The Legislature made some tough decisions, and I think those decisions were in the best interest of New Mexico.”
Several business groups before the session had argued New Mexico needed a more competitive corporate income-tax code. Cole said business lobbyists were preparing for a disappointment and a special session to consider tax-and-spending legislation. Instead, significant tax-code changes were enacted in the session’s closing minutes Saturday.
“If you say that all’s well that ends well, this ended on a much better note than we believed would happen,” said Association of Commerce and Industry CEO Beverlee McClure. The legislation proves “we can help employers in the state while at the same time still be fiscally conservative.”
“This tax package needed the governor and the speaker, or it wouldn’t have worked,” Cole said. “But it also needed some champions in the Senate and the House. Those legislators in the last minutes of the session made it happen like nothing I’ve ever seen before.”
The effort “was largely bipartisan,” she said. “We were able to kiss gridlock good-bye in New Mexico for one marvelous moment.”
“In general, there was compromise,” Romero said. “At the end of the day, the business community did well. I think New Mexico became more competitive.”
The tax package:
⋄ Reduces the top corporate income tax rate from 7.6 percent to 5.9 percent over five years starting in 2014.
⋄ Allows manufacturers to calculate corporate income tax on the amount of their sales in-state.
⋄ Requires multi-state, big-box retailers to calculate their taxes on the basis of their operations nationwide.
⋄ Tightens requirements for high-wage tax credits and gross-receipts tax deductions for consumables available to manufacturers.
Carlo Lucero, the Hispano Chamber’s government affairs committee chairman, said the tax legislation should be used “as a foundation for taking the next steps in terms of economic development.” Even after the corporate tax-rate deduction, New Mexico “will still be in the upper half of our seven neighbors. We need to continue becoming more competitive.”
The state needs a jobs-creation strategy that is supported by tax policy, McClure said.
“We need to know region by region what we can target for new jobs and the jobs that we need to retain,” McClure said. “Then we need to overhaul the tax structure based on retaining and creating those jobs. So we need a plan. We’re starting to see some bipartisan movement toward that.”
All three chambers agree education reform must be part of the state’s economic development effort going forward.
“From my standpoint, the toughest issue in New Mexico and the nation is still education,” Romero said. “Without education, economic development long term can’t happen.” A big missing piece is making school systems accountable for students’ success or failure, he said.
Cole and McClure agreed the Senate Rules Committee confirmation hearings for Education Secretary-designate Hanna Skandera, whose confirmation was never put to a Senate vote, highlighted the problem facing New Mexico.
The hearings “were not about the credentials of Hanna Skandera,” Cole said. “We can’t fix the education problems in the state of New Mexico without someone experienced in how to make those reforms happen. It was clear on the committee there are huge philosophical differences on how to go about reforming education in New Mexico. That debate belongs in the Legislature, not the Rules Committee.”
“We’ve let this become a partisan and political battle versus good policy for what is best for students,” McClure said. “If our education system was ranked higher, I could understand the push-back” on Skandera’s nomination.
— This article appeared on page B1 of the Albuquerque Journal