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Top Dems Offer Tax Options

By David Miles
Journal Capitol Bureau
    SANTA FE— Democratic legislative leaders on Thursday introduced separate tax bills in what they described as efforts to resolve tax issues in the special session.
    House Speaker Ben Lujan, D-Santa Fe, described his bill as a combination of Gov. Bill Richardson's tax proposals and the proposals of the state's Blue Ribbon Tax Reform Commission.
    Meanwhile, seven Senate Democrats sponsored a bill lacking an alcohol tax hike as well as these other provisions backed by the Democratic governor:
   
  • Expanding the Low Income Comprehensive Tax Rebate, which would be renamed the Family and Individual Rebate;
       
  • Increasing income-tax exemptions for lower- and middle-income taxpayers;
       
  • A $2,500 income-tax exemption for higher-income New Mexicans who are at least 65 years old; and
       
  • Allowing health care providers to deduct their taxable gross receipts received from managed care companies and certain Medicare payments.
        Richardson spokesman Billy Sparks said the governor was still studying the new Senate bill. On Lujan's bill, which includes at least part of the alcohol tax hike sought by Richardson, Sparks said Richardson "appreciates the speaker's leadership on this issue."
        Lujan's bill contains the senior-citizen tax break; expansion of the Low Income Comprehensive Tax Rebate; and increased exemptions for low- and middle-income taxpayers.
        "I'm hoping that this at least gives us the opportunity for some more dialogue," Lujan said.
        Lujan's tax bill included the alcohol tax increase supported by Richardson, which would more than double the tax. But Lujan said that was a bill drafting error and that he actually intended a much smaller increase.
        The seven Democrats who sponsored the new Senate bill, including Senate Majority Leader Manny Aragon, D-Albuquerque, earlier this week sponsored a bill backed by the Democratic governor that contained the alcohol tax and the tax relief provisions sought by the governor.
        The first bill would result in a net $135.5 million increase in state and local taxes and fees in the next fiscal year. Richardson on Wednesday said the proposed tax and fee increases were "palatable" to him and called the proposed increase in liquor taxes "good social policy."
        Sen. Ben Altamirano, a Silver City Democrat and a sponsor of both Senate bills, said sponsors wanted to draft an alternative bill in case the tax increases in the first measure doomed its chances of passage.