Tuesday, February 4, 2003
Gov. 'Very Gratified' by Tax Cut Vote
By David Miles
Journal Capitol Bureau
SANTA FE The Senate on Monday unanimously approved a state tax-cut package pushed by Gov. Bill Richardson to slash taxes on personal income and capital gains.
The measure (SB 167), which senators approved on a 39-0 vote, now goes to the House. The proposal would reduce the top state personal income tax rate from 8.2 percent to 5 percent over four years and cut the state's capital gains tax in half over the same period.
The proposal would cost $325 million a year once fully implemented.
Richardson, who called on legislators to send him the tax-cut package by the end of this week, said he was "very gratified" by the Senate's approval.
"The House needs to move immediately to preserve the momentum that will help us bring jobs to New Mexico," the governor said in an interview.
But House Speaker Ben Lujan, D-Santa Fe, said his chamber might not act on Richardson's proposal as quickly as the Democratic governor would like.
Lujan, who is sponsoring a House bill containing Richardson's tax-cut package, said the House Taxation and Revenue Committee might not hold a hearing on that measure until Wednesday or Friday.
The committee had planned to consider the bill on Monday. But the hearing was delayed in order to prepare an amendment to create a "circuit breaker" provision to suspend the tax cuts if state revenues fall short, Lujan said.
Lujan also said he would like the House, Senate and Richardson to agree on an upper limit for spending in the state budget before approving a tax-cut proposal.
"I don't know that we have to speed it up as he'd like for us to do," Lujan said. "I think we need to know where our top dollar is in expenditures."
Sen. Carlos Cisneros, a Questa Democrat who sponsored the Senate bill, called the measure a "bipartisan initiative to stimulate the economy in New Mexico."
Sen. Sue Wilson Beffort, an Albuquerque Republican who co-sponsored the bill, said the package sent a "remarkable message" that the state is trying to attract businesses.
But Sen. Michael Sanchez, D-Belen, complained that the bill wouldn't provide enough tax relief to low- and middle-income taxpayers.
"I don't like it when I see a tax bill that doesn't have anything protecting the very poorest of the poor," said Sanchez, who was not present for the vote on the bill.
Sen. John Arthur Smith, D-Deming, expressed concern that the tax-cut package could result in annual state deficits of as much as $245 million if it failed to stimulate the economy and bring in additional tax revenues.
"I'm extremely apprehensive right now with what we're doing," Smith said.