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Saturday, May 15, 2010
New Mexicans Were Paid Less in 2009
By Dan Boyd
Journal Capitol Bureau
SANTA FE — Lean Tax Day returns that reflect a still-shaky New Mexico job market could offer the latest evidence yet that the state isn't out of a fiscal quagmire.
Preliminary state personal income tax receipts for April compiled by the Legislative Finance Committee show that New Mexicans reported getting paid significantly less in 2009 than they did in 2008.
In fact, the April 2010 preliminary personal income tax return figure of $106 million is about 20 percent less than the April 2009 figure of $131 million.
However, better-than-expected revenue from oil and natural gas taxes and royalties are, for now, largely offsetting the sting of sagging tax returns.
"Right now, it doesn't seem like it's going to be too bad at the end of the fiscal year," said Rep. Luciano "Lucky" Varela, D-Santa Fe, the chairman of the LFC.
The most recent data suggests that the state could reach that date — June 30 — with $20 million to $30 million less than originally projected, Varela said.
If that's the case, the Department of Finance and Administration would be able to use currently available cash reserves to plug the gap between expenditures and revenue.
But the state's sagging job market — the March unemployment rate of 8.8 percent is the state's highest rate since July 1987 — and declines in taxable retail sales have some lawmakers concerned.
"I was hoping by now we would see some positive rebound," said Sen. Carlos Cisneros, D-Questa, the vice chairman of the Senate Finance Committee. "Things aren't looking as rosy as some folks projected."
Economists in Gov. Bill Richardson's administration and those from the Legislative Finance Committee recently testified that they're $65 million apart in their tracking of incoming state revenue for the current budget year.
That's at least partly due to different expectations about how and when incoming state revenues should be deposited.
Cisneros said Richardson's March veto of a food tax measure that would have generated an estimated $68 million per year complicates the picture.
"That just means we're going to have to come in and make cuts or cuts we wouldn't have otherwise had to make," he said.
New Mexico's year-to-year spending has decreased by more than $600 million in the last two years due to a steep decline in incoming revenue levels.
State lawmakers have already cut spending, approved tax increases and are considering whether to merge state agencies to save additional money.
Personal income taxes, which aren't solely paid in April, make up about 20 percent of state revenues.
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