Thursday, March 6, 2003
Bills Sweeten the Pot for Lawmakers
By Loie Fecteau
Journal Politics Writer
SANTA FE Legislators have uncorked a new plan to sweeten their retirement benefits by tapping uncollected taxes on out-of-state residents receiving payments on oil and gas interests in New Mexico.
A new formula would increase the annual retirement benefit of current legislators to $1,044, times the number of years of service. So, someone who served 20 years in New Mexico's part-time, unsalaried "citizen" Legislature would receive $20,880 a year in retirement benefits.
Under a separate formula, a former legislator who had retired after 20 years, and currently receives $5,000 in retirement benefits a year, would receive $10,000 a year.
But Senate Minority Leader Stuart Ingle, R-Portales, sponsor of the new plan, said it wouldn't cost New Mexico taxpayers a dime.
Under New Mexico's current legislative retirement system, a participating legislator puts in $100 a year, which supplements a state contribution.
The retirement benefit is then calculated by a multiplier of 2.5 on the $100 contribution, times the number of years of legislative service. So a legislator who served 20 years can receive $5,000 a year in retirement benefits.
The Senate this week overwhelmingly approved the two bills (SB 620 and committee substitute for SB 621) sponsored by Ingle, to create the new retirement system for current and former lawmakers. The measures moved on to the House for consideration.
Ingle said the current New Mexico legislative retirement system costs state taxpayers between $600,000 and $700,000 a year.
Under his plan, the money to pay for the program would come from previously uncollected tax revenue from nonresidents who own oil and gas interests in New Mexico, Ingle said.
Ingle estimated the new legislative retirement plan could cost between $2 million and $3 million a year. It would be paid for by requiring companies that pay oil and gas royalties to out-of-state residents to withhold tax charges of 63/4 percent, much of which goes uncollected now, he said.
Any additional revenues generated by the tax withholding system on nonresidents above the legislative retirement costs would go into the state's General Fund for government programs, Ingle said.
"It's going to cost the people of the state of New Mexico no money, and it will generate several million dollars for the people of the state of New Mexico," Ingle said
Under Ingle's proposal, a New Mexico legislator's contribution would rise from $100 to $500 a year, and he or she would have to retroactively pay into the plan to boost all previous years' contributions to the $500 level.
Former legislators could increase their retirement benefits from $250 annually for each year of service to $500 annually for each year of service, under Ingle's plan. They would have to retroactively pay an additional $100 for each year of service to receive their increased benefit.
Gov. Bill Richardson is "presently studying the equities" of the legislative retirement plan, Richardson spokesman Billy Sparks said Wednesday. "This has been a controversial issue in the past," Sparks said.
Former Gov. Gary Johnson, Richardson's predecessor, vetoed a different plan, increasing taxpayer costs, to boost legislative retirement benefits.