ALBUQUERQUE, N.M. — A key Senate panel was forging ahead tonight on a package of solvency measures to help bridge most — if not all — of a $589 million budget shortfall for the current and just-ended fiscal years.
Solvency bills approved by the Senate Finance Committee included a proposal, Senate Bill 5, to delay a scheduled corporate income tax rate cut — included in a 2013 tax package — for two years, a concept the Martinez administration opposes.
In speaking against the legislation, Taxation and Revenue Secretary Demesia Padilla said the corporate income tax cut was crucial in helping the state land a recent commitment from Facebook to build a massive data center near Los Lunas.
“Basically, we are sending out a message that if New Mexico decides to do something with its corporate tax structure, it’s not going to be reliable,” Padilla said.
But Senate Finance Committee Chairman John Arthur Smith, D-Deming, said the measure and others like it are necessary to avoid state furloughs of critical public safety workers.
“We’re not repealing this at all — we’re just slowing it down,” Smith said before the bill passed on a party-line 6-4 vote.
The Senate Finance Committee also passed and sent to the full Senate bills taking $77 million from various state government accounts and freeing up nearly $90 million in capitol projects by canceling some projects and changing the funding source for others.
Other parts of the Senate solvency package included:
* Authorizing the state to tap all or most of $226 million tobacco fund created in response to a 1999 legal settlement.
* Narrowing a high-wage job tax credit and capping its annual payout at $24 million.
* Accelerating, for one year, a phase out of a hold harmless subsidy the state pays to cities and counties to offset revenue lost by not taxing grocery and medical items.
In addition, the Senate panel also approved legislation that backers say would increase gross receipts tax collections by removing a plant limit on the state’s 35 licensed medical marijuana producers — there is currently a limit of 450 plants for producers.
New Mexico is facing a $131 million budget deficit for the fiscal year that ended in June and an estimated $458 million shortfall for the current year, as plummeting oil and natural gas prices have led to the state taking in far less revenue than expected over the last two years.