Tax overhaul to be on special session agenda - Albuquerque Journal

Tax overhaul to be on special session agenda

Copyright © 2017 Albuquerque Journal

Gov. Susana Martinez made it explicit Thursday: Simplifying New Mexico’s tax system is, in her view, a key to solving the state’s budget crisis and a standoff with the Legislature.

She said Thursday that she will add “comprehensive tax reform” to the agenda of a coming special session.

“Despite the challenges,” Martinez said in a speech, “we have a tremendous opportunity.”

The session will focus on crafting a new budget package aimed at ensuring New Mexico has enough cash to continue paying its bills over the next year – amid a downturn in oil and natural gas prices and the nation’s highest unemployment rate.

Gov. Susana Martinez
Gov. Susana Martinez

Overhauling the tax code, Martinez said, “is both a short-term and a long-term solution.”

She didn’t offer specifics on what changes are necessary to break the budget impasse. But she said the state should eliminate virtually all the tax breaks built into the gross receipts tax code – which, in turn, would create a broader tax base and allow the overall tax rate to be lowered.

The overhaul isn’t designed to raise new revenue, but it could generate extra money to help next year’s budget if some tax breaks are phased out before the overall tax rate is lowered in a future year.

In a written statement, Senate Majority Leader Peter Wirth, D-Santa Fe, said many of the tax ideas backed by the governor were already rejected by Democrats and Republicans in the Senate. But he said he shares the goal of broadening the tax base and lowering the rate.

“Comprehensive tax reform is a good goal supported by legislators on both sides of the aisle,” Wirth said. “But tax reform has to be done right.”

Rep. Jason Harper, R-Rio Rancho, said he has been talking with Democratic leaders about how to craft a package of tax changes that both sides can support. The Martinez administration is offering technical help to ensure the changes do what they’re intended to, he said.

“I’m really confident that with all these minds in the room,” Harper said, “we’ll come up with something even better than” the proposals debated in the last legislative session.

A Harper-sponsored bill cleared the House earlier this year but stalled in the Senate over concerns about whether it provided for too many changes too fast. Both chambers later passed a more modest attempt at overhauling the tax system, which Martinez vetoed.

But Harper said Thursday that he hopes negotiations can produce a “hybrid” tax bill – drawing from the previous proposals rejected by one side or the other – for consideration in a special session.

Harper and Martinez made their remarks Thursday at Sandia Resort and Casino at the annual conference of the New Mexico Tax Research Institute, a nonpartisan group that analyzes tax policy.

The Republican governor and the Legislature – where Democrats hold majorities in both chambers – have been at odds for months on a spending and revenue plan for the fiscal year that begins July 1.

State lawmakers passed a $6.1 billion spending plan and a companion bill that included about $350 million in new revenue generated by tax increases and the closing of loopholes. Both bills had bipartisan support in the Senate and passed along party lines in the House.

Martinez, in turn, vetoed the tax package and used her line-item veto authority in the budget bill to strip out funding for public colleges and the Legislature itself. She describes the absence of higher-education and legislative money as only temporary – a move to ensure lawmakers negotiate a balanced budget without tax increases.

Martinez has not set the date for a special session.

Legislative leaders have challenged her line-item vetoes in the New Mexico Supreme Court, and a hearing is set for May 15. The governor didn’t say whether she plans to call the Legislature into session before then.

She has repeatedly vowed to reject tax increases, but she has left open the possibility of generating new revenue through the closing of tax loopholes – positions that make the tax overhaul a key to helping resolve the budget impasse.

Democrats, in turn, say they already sent the governor a menu of tax options that would have helped raise revenue and put the state on track for a broader tax overhaul, even if she rejected some of the ideas.

Election Guide

Home » Journal North » Journal North Recent News » Tax overhaul to be on special session agenda


Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email yourstory@abqjournal.com

taboola desktop

1
Albuquerque Community Safety department completes first year
ABQnews Seeker
The Albuquerque Community Safety department has ... The Albuquerque Community Safety department has responded to more than 16,000 calls during its first year in operation, about half of which it says ...
2
Bonobo coming to Sunshine Theater in support of latest ...
ABQnews Seeker
Bonobo is having a few days ... Bonobo is having a few days of rest in New York City before he heads out to Washington D.C., to start the last leg ...
3
PBS series looks at three global rivers and the ...
ABQnews Seeker
Rosemary Edwards knows that rivers are ... Rosemary Edwards knows that rivers are an important source of life. This is why Edwards stepped in to be the executive producer of the ...
4
‘Walker Independence,’ filmed in Santa Fe, will debut on ...
ABQnews Seeker
no matter the situation. The actor ... no matter the situation. The actor believes he can take something from each lesson. He's currently learning what it's like to live in the ...
5
Fall weather interrupts Balloon Fiesta events
ABQnews Seeker
Fall weather has arrived in Albuquerque, ... Fall weather has arrived in Albuquerque, along with the enticing aroma of roasting green chile, the chill of crisp mornings and the view of ...
6
Youngkin heading west to campaign with Ronchetti
ABQnews Seeker
Mark Ronchetti's bid to win the ... Mark Ronchetti's bid to win the Governor's Office is getting a boost from another prominent Republican governor. Virginia Gov. Glenn Youngkin will make campaign ...
7
Modernizing the grid: Smart meters, cybersecurity measures part of ...
ABQnews Seeker
Utility asks PRC to approve $344M ... Utility asks PRC to approve $344M investment over six years
8
Dean Hansel Burley receives vote of no confidence
ABQnews Seeker
Provost will consider faculty's position Provost will consider faculty's position
9
Montgomery speed cam MIA; balloonists block neighborhood
ABQnews Seeker
City temporarily removed Montgomery camera after ... City temporarily removed Montgomery camera after vandalism