Gov. Susana Martinez on Monday signed into law a measure to bring tax treatment of business losses in line with federal tax law and the practice of neighboring states.
“This is another way of telling businesses we are ready for them to come to New Mexico,” Martinez said at a signing ceremony during a New Mexico Society of Association Executives luncheon in Albuquerque.
New Mexico tax law allowed businesses and business owners to deduct net operating losses on corporate and personal income tax forms for five years beyond the year in which they occurred. The new law gives them 20 years to write off the losses.
State Taxation and Revenue Secretary Demesia Padilla told the Journal the five-year limit was a means of securing more revenue for the state general fund. Legislative Finance Committee analysts estimate the change will have no revenue effect until 2018, when it will reduce tax collections $6 million.
Martinez also signed legislation moving an apprenticeship assistance program from the Public Education Department to the Department of Workforce Solutions, and a $2 million appropriation to help small communities plan water projects.
The governor said the recently concluded legislative session was one of the most partisan she’d experienced but was ultimately successful. “We emerged with a tremendous set of bipartisan accomplishments,” she said, including tax breaks for aviation companies, $89 million for water projects, measures to expand the state’s health care work force and more money for education than ever before in state history.
However, Martinez said, funding education is not the entire solution. Funds need to target struggling schools and students, but instead too much money is “funneled through the bureaucracy” because labor unions and some legislators resist change, she said.
She expressed disappointment her multi-year effort to force schools to hold third graders back if they can’t read proficiently again failed to pass the legislature.
And she called the Legislature’s failure to confirm some of her cabinet secretaries, including Education Secretary Hanna Skandera, a “political circus.”