E-mail Story
Print Friendly
Send E-mail
Reprint story
Tuesday, November 03, 2009
Governor: Tax Hikes 'Inevitable' Next Year
By Dan Boyd
Journal Capitol Bureau
SANTA FE — New Mexicans should brace for tax increases in 2010, Gov. Bill Richardson warned Monday.
"It's inevitable," Richardson told a news conference in the state Capitol. "It's very painful."
Richardson ruled out tax hikes during a recent special legislative session called to deal with a projected $650 million state deficit for this year. His remarks Monday represented his strongest words to date on the likelihood of increasing taxes during the regular session that begins in January.
Reaction to Richardson's remarks were mixed.
Sen. Dede Feldman, D-Albuquerque, agreed with Richardson and said tax loopholes should be closely scrutinized.
"We should remember that we're not constitutionally prohibited from raising taxes," said Feldman, who pointed out that tax increases in some other states must be approved by voters. "We do need all those tools."
However, Senate Minority Leader Stuart Ingle, R-Portales, said runaway state spending should be examined closely before tax hikes are entertained.
"We need to look at a lot of other things before we concede we need to raise taxes," Ingle said.
Although Richardson didn't specify Monday what kind of tax increases might be considered, so-called "sin taxes," or taxes on products such as alcohol, tobacco and soft drinks, will probably be among the possibilities.
Richardson is planning to announce in the next several days the makeup of a working group that will study potential tax increases before the start of the 30-day session, in which lawmakers will set next year's budget. More than 20 tax proposals could be on the table for the working group to study, Richardson said.
Among the proposals could be reinstating the personal income tax rates that were scaled back in 2003 and new tax requirements on out-of-state corporations.
"In a longer session, it makes more sense," Richardson said of the decision to hold back on tax increases until 2010.
Richardson also hinted Monday that he may veto a key section of the budget-cutting bill approved by lawmakers during the special session that ended Oct. 23.
State agencies under Richardson's control have said the budget cuts, which average 7.6 percent for most agencies, would force employees to be furloughed, two state prisons to be closed and up to 660 inmates to be released early, Medicaid services to be pared back and more.
"I have line-item veto authority. I'm going to use that responsibly," Richardson said when asked about the budget-balancing bills. "I'm going to use it in a way that protects citizens but also recognizes our deficit."
Richardson said he doesn't want to veto the entire budget-cutting bill, which was part of a package of solvency bills, saying such action "wouldn't send the right signal."
The bill also includes smaller cuts to public education, higher education, the judicial branch and the State Police.
Richardson proposed a 3.5 percent cut to state agencies before the start of the seven-day special session, and he could issue an executive order trimming the spending of agencies under his control should the legislation be vetoed.
The Democratic governor plans to hold office hours on Wednesday in Albuquerque and Las Cruces to hear from New Mexico citizens on the subject of the budget cuts. He has until Nov. 12 to take action on the bill.
Lawmakers say some of the implications of the budget cuts are being overblown. They assert that with tax increases ruled off-limits for the special session by Richardson and education cuts ordered to be kept at a minimum, deeper budget cuts to state agencies were necessary.
However, Richardson said Monday that errors in how the budget-cutting bill was drafted — primarily in the area of Medicaid spending — would actually force him to slash $125 million from state agency budgets, not the $93.7 million that lawmakers intended.
Some groups have already begun to weigh in on the special session budget cuts, such as a coalition of 24 public employee unions, social advocacy groups and religious organizations called "Better Choices New Mexico" that sent Richardson a letter Friday urging the governor to take up his veto pen.
You also can send comments via our comment form
|
|
