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Gov. Presses Pre-K, Tax Ideas

By Barry Massey
The Associated Press
    SANTA FE— With just over a week left in the legislative session, Gov. Bill Richardson is stepping up pressure on lawmakers to accept his tax cut and pre-kindergarten proposals.
    Those measures have run into resistance in the Legislature, and Richardson is trying to avoid what would be a politically embarrassing setback if the Democratic-controlled Legislature doesn't approve at least some version of his initiatives.
    On Thursday, the Democratic governor renewed his threat to call lawmakers back to work in a special session if they don't fully fund his preschool proposal and approve tax cuts.
    "I said that if I didn't get my tax cuts or pre-k, there would be a special session and that is still the case," Richardson said at a news conference.
    The governor has offered lawmakers a potential compromise on taxes in hopes of securing approval of a package of tax reductions costing more than $30 million.
    House Speaker Ben Lujan, D-Santa Fe, said he thought the governor's latest proposal on taxes— stretching out the implementation of income tax reductions enacted in 2003— might be acceptable to lawmakers if a broader agreement can be reached on budget issues.
    "We're working hard to try to get that done," said Lujan.
    He also said lawmakers were looking at possible "enhancement" proposals to generate additional revenues.
    The governor's tax proposals have run into trouble because lawmakers are uneasy about the state's long-term financial outlook and whether there will be adequate money to pay for currently enacted initiatives, such as higher teacher salaries, if taxes are further reduced.
    The House and Senate have approved budget proposals that spend all available revenues on programs and services. That leaves no unallocated money, which would be needed to offset potential tax cuts.
    To get around that problem, Richardson is recommending that lawmakers extend the time for phasing in personal income tax reductions enacted in 2003. His proposal has the effect of freeing up $32.5 million in revenue next year that could cover his package of new tax cuts for individuals and businesses.
    "I've compromised a bit. I recognize that. But I want the tax cuts to pass. There has got to be tax cuts in this budget," said Richardson.
    The governor wants lawmakers to approve income tax reductions targeted to lower and middle-income New Mexicans and single parent families; a once-a-year "tax holiday" on back-to-school purchases such as clothes and computers; and tax relief for businesses to lessen the pyramiding of the gross receipts tax.
    For pre-kindergarten, Richardson is seeking $9 million to start programs next year to serve 3,100 of the state's 26,000 4-year-olds.