Wednesday, March 19, 2003
House OKs Bill To Boost Lawmakers' Retirement Benefits
By Loie Fecteau
Journal Politics Writer
SANTA FE A plan to fatten retirement benefits for New Mexico legislators by tapping uncollected taxes on out-of-state residents is headed to the governor.
The money would come from uncollected New Mexico taxes on royalties paid to out-of-state residents on their New Mexico oil and gas interests. Whatever the state now is able to collect goes into New Mexico government accounts to support state programs.
The House voted 58-6 on Tuesday to support the financing plan (committee substitute for SB 621), which previously had been approved by the Senate.
The House also approved a companion bill (SB 620) that would substantially increase the retirement benefits of current and former legislators on a 56-7 vote. The Senate subsequently agreed on a voice vote to go along with House changes to that bill.
"I think at $250 a year, there's a lot of room to fatten that retirement benefit," Rep. Terry Marquardt, R-Alamogordo, told his House colleagues.
Marquardt was referring to the current retirement plan for legislators, which is calculated by a multiplier of 2.5 on a $100-a-year lawmaker contribution. Under the current system, a legislator who has served 20 years is eligible to receive $5,000 a year.
Under the latest plan, a legislator who had served 20 years would be eligible to receive $19,140 a year. A legislator would have to contribute $500 a year for each year of service, up from $100 a year, to participate.
Former legislators, who had retired after 20 years, could receive $10,000 a year under a separate formula. They would have to retroactively pay an additional $100 for each year of service to receive the increased benefit.
Legislators have been lobbying Gov. Bill Richardson to get him to go along with the plan to beef up the retirement benefits for New Mexico's part-time, unsalaried "citizen" Legislature.
Richardson had said he was skeptical of the original Senate-passed plan.
Rep. Max Coll, D-Santa Fe, said he hoped the House changes would make the legislative retirement plan acceptable to Richardson.
At Coll's suggestion, the House reduced a new formula to calculate the annual retirement benefit of current legislators from $1,044 to $957, times the years of service.
"He (Richardson) didn't swear he'd sign it or anything," Coll told his colleagues. "He seems to think he might look on it more favorably."
Supporters have estimated the new legislative retirement plan could cost up to $3 million a year.
Under one of the bills that went to Richardson, the retirement benefits would be paid for by requiring companies that pay oil and gas royalties to out-of-state residents to withhold tax charges of 6.75 percent, much of which goes uncollected now, Coll 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.