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Gov., Dems Tout Job Growth

SANTA FE, N.M. — Gov. Susana Martinez drew rave reviews from Albuquerque-area business leaders for her business tax reform package Monday while Democrats in Santa Fe outlined their own proposals to boost the state economy.

The package unveiled by Senate Democrats on Monday included 11 measures, more than half of them proposing new tax credits, that supporters said will lead to more hiring, companies moving to the state and less reliance on the oil and natural gas industries.

The plan includes $5,000 per year for hiring a graduate of a state university, lower income taxes for increasing the wages of current workers and a tax break on transporting agricultural crops outside state lines.

Legislator paychecks

Sen. Tim Keller, D-Albuquerque, called the package “bigger and better” than Martinez’s plan, claiming it exceeds the scope of the governor’s approach.

Other senators said the revenue hit would be offset by requiring companies to meet certain requirements before receiving a tax break.

Meanwhile, Martinez elaborated on her $55 million business tax reform package at a lunch sponsored by regional chambers of commerce and attended by 500 members of the business community.

Martinez, who described the members of the Albuquerque, Hispano, Rio Rancho and Belen chambers of commerce as the “people who get it,” repeated her proposal to exempt about 40,000 small businesses from the state’s gross receipts tax to promote growth, offset gross receipts taxes for manufacturing and research and development sectors and eliminate “tax pyramiding,” the double or triple taxation of some goods and services.

“New Mexico has to become more competitive and we have to bring along our Legislature to understand that they serve us, the small businesses,” Martinez said.

The governor suggested her policies could help reverse the lack of growth in manufacturing jobs since 2009 in New Mexico, pointing out that neighboring states of Colorado, Arizona, Texas and Oklahoma have all reported new jobs in that sector. Oklahoma, Martinez said, has reported a manufacturing jobs spike over 9 percent.

Martinez cited an Ernst & Young report that described the state’s taxes as the nation’s most burdensome for businesses and criticized the Democratic-controlled Legislature for dragging its feet on her agenda.

“If we’re going to reform New Mexico in a big way, not just our educational system, but making sure businesses understand that New Mexico is open for business, we have to make sure these bills are moving along (in the Legislature). But we also have to speak in a very loud and cohesive voice that we want a level playing field, we want small businesses to stay here,” Martinez said.

In addition, Martinez repeated her plan to expand the state’s Job Training Incentive Program, increasing state reimbursements for businesses to train their employees to $10 million per year, up from the $1 million now available. The governor also has proposed a $1,000 tax incentive for businesses that hire veterans.

The governor’s proposals – and shots at the Legislature less than a week into its 30-day session – drew praise from business leaders at the Albuquerque luncheon.

“I think it’s great that for the first time in eight years it feels like we’re on the offense instead of being on the defense,” architect Dale Dekker told Martinez, drawing applause from the group.

But Senate Democrats said their package of proposed legislation – dubbed the HIRE initiative (Helping Incentivize Real Employment) – would boost the state’s economy without providing “giveaways” to specific companies.

“What we’re asking in each of these bills is true investment in New Mexico before a credit goes out the other end,” said Sen. John Sapien, D-Corrales.

The plan also includes Senate Democrats’ take on how to address the state’s tax pyramiding for businesses and a tax credit for private companies that give pay raises to their New Mexico workers.

Some of the proposed legislation stems from talks between labor and business groups organized last year by the Senate’s top-ranking Democrat, Michael Sanchez of Belen.

Most of the proposed legislation aimed at creating jobs – both Martinez’s plan and the Democrats’ package – would reduce the state’s incoming revenue levels, at least up front, by offering tax incentives.

Martinez’s tax cut plan would cost $55 million; the total cost of the Democrats’ was unclear Monday, but could exceed that amount.

New Mexico already has hundreds of tax credits, exemptions and deductions on its books. The cost to the state of those tax breaks – which range from rebates to film companies to tax credits for wind energy production – is estimated to total more than $922 million in the upcoming budget year, according to the Legislative Finance Committee.

Plan From Democrats Includes Tax CreditsLegislator paychecks Public employees serving as lawmakers would have to take unpaid leave under a plan by some House Republicans A4See DUELING on PAGE 3MARTINEZ: Addressed chambers of commerceKELLER: Says plan by Dems is ‘bigger and better’

LEGISLATURE 2012

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