“I’ve never seen a tax credit that wasn’t a good idea for the entity getting it.”
— Sen. Bill Payne, R-Albuquerque
In the shadow of $85 billion in federal sequestration cuts and a $113-million-a-year attempted raid on New Mexico’s Land Grant Permanent Fund, there are still about 60 groups looking for tax breaks at the Roundhouse.
The proposed 60-or-so new/expanded breaks would add to the already $1 billion the state forgoes in tax revenue from the film industry, businesses that provide “high-wage jobs,” for-profit hospitals and 110 others.
Wending their way through the current legislative session are additional carve-outs for chile producers, television productions, a railway, school bus companies, aircraft manufacturers and racinos, among others.
No one exemption/deduction/credit would bust the $5.9 billion state budget. But $1 million here and $50 million there, and suddenly with just the current tax breaks you’re talking $1.1 billion that won’t be in the fiscal 2014 budget. That’s $1.1 billion that has to come from somewhere —make that someone — else.
Lawmakers should not debate whether the current incentives are valid or the proposed recipients are deserving — well-targeted tax incentives can spark economic development. They should debate whether the current and proposed breaks are well targeted. If the state can afford them. Or if it would derive more benefit if it stopped banking on special exemptions and revised the tax system so everyone pays broader, lower taxes.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.