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Opinion piece: Don’t waste New Mexico’s opportunity — get rid of income tax

The following opinion piece ran in the Santa Fe New Mexican on April 22nd, 2022. The piece also ran in other newspapers throughout the state.

New Mexico is in a unique economic situation. Despite having the highest unemployment rate in the nation for all of 2022, our incredibly strong oil and gas industry, buoyed by high prices and rapid production growth, have given politicians in Santa Fe “more money than they know what to do with.” So, in the recent 30-day session, we saw spending grow by more than $1 billion and some significant tax cuts. Then, in a special session, rebates to be paid out to taxpayers and non-taxpayers alike.

The impetus to return money generated by the oil and gas industry to New Mexicans is welcome, but there are serious questions about the legality and logistics of handing out checks to those who don’t pay taxes to the state. Furthermore, asking the Tax and Revenue Department to hand out cash “only” to those who deserve it is an unenviable and impossible task that also seems to violate the state’s anti-donation clause.

But, after three years of Gov. Michelle Lujan Grisham and the Democrats raising taxes, it is hard to complain about getting money back.

Of course, this is an election year, and by all accounts, Democrats, including Lujan Grisham, face a challenging political environment. Rising inflation is never popular. And, as COVID-19 concerns wane and voters consider Lujan Grisham’s record in fighting it as balanced against economic concerns and their children’s educations and mental health, her record appears wanting.

A recent report from the National Bureau of Economic Research found that only New York and New Jersey performed worse than New Mexico did during the coronavirus pandemic. Considering that New Mexico’s economy remains weaker than our neighbors, that our kids missed more school and faced big declines in reading and math, and that none of this caused New Mexico to have particularly good COVID-19 outcomes in terms of lost lives, only lends credence to the report.

In the absence of a strong track record on these core issues, the governor clearly plans to use handing money generated by oil and gas for her political benefit. That may aid her reelection chances, but nothing she and the Legislature have done to date will improve New Mexico’s overall economy which remains challenged.

The fundamental economic problem New Mexico faces is its unattractive business climate. Addressing the gross receipts tax and its “pyramiding” and taxation of services as business inputs has been discussed for years now, but it is time to seriously consider bolder economic reforms like reducing or even phasing out New Mexico’s personal income tax.

Indeed, the personal income tax is expected to generate just over $2 billion in fiscal year 2023. That’s a lot of money, but New Mexico is in a financial position to reduce income tax rates over time. Combined with business-friendly gross receipts tax reform, modest budgetary restraint (annual spending simply can’t grow by 15 percent) and a focus on truly diversifying New Mexico’s economy could allow New Mexico to become income-tax-free.

Nine states already lack an income tax. Most New Mexicans know that Texas with its prodigious oil supplies does not tax personal incomes, but most other states lacking income taxes have nothing like our oil and gas revenues. Florida has no income tax. Same with Tennessee and South Dakota. New Hampshire has both no income tax and lacks a sales tax. None of them has significant oil revenues.

New Mexico has suffered economic and social mismanagement over the last few years. Record oil and gas revenues are helpful, but as New Mexicans contemplate the coming elections, it should be more apparent than ever that more spending has not and cannot solve the state’s social ills. It is time for genuinely bold solutions.

New Mexicans simply can’t allow this oil and gas-fueled opportunity to pass.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization.

 

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2022 Freedom Index Results Published

The Rio Grande Foundation uses its “Freedom Index” vote tracking site to  hold New Mexico legislators accountable for their stances on individual freedom and personal liberty. We have rated all bills that impact individual freedom that received floor votes for the 2022 session and thus the current Index results are “final.”

Every bill receiving a score is rated on a scale from -8 through +8 depending on its overall impact on YOUR personal freedom. In the 2022 session the most impactful vote (-8) was on SB 14, the Clean Fuel Standard. A full analysis of that bill can be found here.

The BEST bill voted on this session was HB 163, that is the bill which includes several tax cuts (RGF analysis of that bill here). It received a +4 rating in the Index.

Rep. Stefani Lord (R) who represents parts of the East Mountains of Albuquerque scored a 45 which was the highest rating of the session.

Rep. Randall Pettigrew (R) who represents Lea County scored a 43 which was good for the 2nd-highest rating of the session.

Sen. Craig Brandt (R) who represents Rio Rancho scored 33 which was the highest rating for any senator (the Senate and House vote on different bills and the House typically takes more votes and thus has higher and lower scores).

Sen. Antoinette Sedillo-Lopez (D) who represents parts of Albuquerque scored -66 which was the lowest rating for any member of the Legislature.

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RGF opinion piece: Session could have been a lot worse

The following appeared in several newspapers in the wake of New Mexico’s 2022 legislative session including the Carlsbad Current-Argus on February 23, 2022.

The 2022 30-day legislative session could have been much worse. It is no secret that we at the Rio Grande Foundation have disagreed with most of Michelle Lujan Grisham’s major efforts as Governor. She surprised many of us in her State of the State speech when she proposed elimination of the Social Security tax in New Mexico.

After three years of ruling as a hard left “progressive,” the Governor’s change of tune heading into the 2022 session was notable. Is her move solely due to her impending reelection? We’ll never know, but it is a welcome shift.

The most notable good legislation that passed this session was the tax cuts (HB 163). Unfortunately, the Social Security tax was not completely eliminated, but it will no longer apply to a vast majority of taxpayers. As a bonus, military pensioners received a break on their pensions for at least the next 5 years.

The State gross receipts tax rate will be cut under the tax reform package (barring a drop in state revenues) and a small child tax credit was added. Finally, the Legislature acknowledged that gross receipts tax pyramiding on business-to-business service inputs is a problem, but they only addressed the issue for manufacturers.

These tax cuts, if fully enacted, will reduce tax revenues by $400 million or so annually, are dwarfed by the massive increase in government spending. Spending rose by $1 billion this year alone.

All of this is thanks (mostly) to the booming oil and gas industry which shows no sign of slowing down, but money being printed up in Washington also played a role. Of course, while the Gov. will tout the raises for government employees in general and teachers specifically, with the current rate of inflation, those raises won’t be as helpful to families’ bottom lines.

Numerous bad bills were considered during the session that (thankfully) died. Most notable among these was SB 14 the “Clean Fuel Standard.” While rising gas prices have contributed to the State’s budget surplus, for average New Mexicans high gas prices are just another sign of inflation. Given those high prices it was a shock that Lujan Grisham made it her mission to pass this legislation, which would have increased gas prices at the pump by 35 cents/gallon.

The bill became even more confusing when, in the waning days of the session, an amendment was added to keep the San Juan Generating Station coal fired plant in Farmington open through next summer. PNM which owns the plant is nervous that it won’t have enough electricity to keep the lights on when the plant closes in June to comply with Lujan Grisham’s 2019 “green new deal” legislation.

Thankfully, with only hours to go in the session, SB 14 died on a tie vote in the House.

Another bill that, thankfully, died was the so-called “election reform” bill. Starting out, this bill was SB 8 and it had straight party voting, a “permanent” absentee voter list, allowing 16 and 17 year olds to vote, and, most outrageously, a provision allowing mailed ballots to be collected as late as the Friday after the Election Day.

Through a series of amendments and changes the election reform bill became SB 144. It was still problematic due to the unnecessary loosening of voting rules, but it died on the Senate floor as time expired.

Plenty of bills never received a floor vote. The Democrat-dominated Legislature (again) failed to restore a seat at the table for itself in emergencies. On the positive side of things, Las Cruces Sen. Bill Soules’ absurd SB 204 which would have appropriated $1 billion as part of a down payment on a high-speed train from the border with Mexico to Colorado, went nowhere as well.

This session could have been a lot worse. But, a moderately-successful 30-day session with November’s elections staring the Gov. in the face does not an ideological shift make.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

 

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RGF and prominent state, national leaders, send legislators letter opposing arbitrary interest rate limit

Here is our letter as a PDF. You can read the full letter below:

We write to you to express our opposition to H.B. 132, a bill that would impose a 36% rate cap on most consumer loans. New Mexico Republicans must stand united for consumer choice and access to credit. There has been a great deal of misinformation spread on the matter of interest rate caps, but little attention focused on what a rate cap would mean for the citizens of New Mexico.

Making small dollar loans more affordable for consumers is a goal we can all get behind, but this bill will eliminate consumer choice and hurt consumers. In other states with a 36% rate cap on small dollar loans, we’ve seen what happens: responsible lenders are forced out of the state taking jobs and financial opportunities with them. Workers and families that need credit to make ends meet some months are left with fewer choices – and less desirable ones at that.

The fact of the matter is 40% to 50% of New Mexicans have access to bank accounts, savings, credit cards, and lines of credit to draw upon to meet their financial needs.  But there are more than 500,000 New Mexicans, whether because they do not have bank accounts or due to subprime credit scores, who do not have access to any form of credit other than short-term installment loans.

It is an indisputable fact that financial institutions cannot make a small dollar loan at 36% and make a profit unless it for an amount of about $3000. The National Commission on Consumer Finance study confirmed it.[i] The CFPB’s Taskforce on Federal Consumer Financial Law report confirmed it. [ii] A Federal Reserve study on interest rate caps confirmed it.[iii]

But most customers don’t want or need a $3000 loan.  In New Mexico, more than 60% of small dollar loans are for less than $1000.

Credit unions in New Mexico claim they will “step up” to fill the vacuum in the wake of this legislation’s passage and offer small dollar loans. But New Mexico’s credit unions haven’t offered these small dollar loans to the subprime customers who will be impacted the most.

The president and CEO of the credit unions’ national association, Jim Nussle, has stated that rate caps will not work for his members. “[T]he establishment of a national all-in rate cap applicable to all creditors is an unproven one-size-fits-all policy, the consequences of which will likely include reduced access to credit from reputable lenders.” iv

State financial regulators in North Carolina and Georgia have reported real economic suffering in the wake of 36% rate cap impositions.v  Should you support this legislation you will be denying more than 500,000 of your fellow New Mexico citizens and constituents access to the only form of credit they have today.

There must be a more responsible way to approach this issue.

Conservative advocates agree. Oppose HB 132.

Respectfully,

Paul Gessing
President, Rio Grande Foundation

Carla Sonntag
President and Founder, New Mexico Business Coalition

Heather R. Higgins
CEO, Independent Women’s Voice

David Williams
President, Taxpayers Protection Alliance

Jeffrey Mazzella
President, Center for Individual Freedom

Matthew Kandrach
President, Consumer Action for a Strong Economy

Saulius “Saul” Anuzis
President, 60 Plus Association

Mario H. Lopez
President, Hispanic Leadership Fund

Stephen Pociask
President and CEO, American Consumer Institute

CC: All Members of the New Mexico Legislature

[i] National Commission on Consumer Finance. Consumer Credit in the United States. Washington, DC: US Government Printing Office, 1972.

[ii] Consumer Financial Protection Bureau, Taskforce on Federal Consumer Financial Law [hereinafter CFPB Taskforce]. (2021, January). Taskforce on Federal Consumer Financial Law Report. Retrieved from https://www.consumerfinance.gov/documents/9449/cfpb_taskforce-federal-consumer-financial-law_report-volume-1_2021-01.pdf..

[iii] Chen, L., Elliehausen, G. Board of Governors of the Federal Reserve System (2020, August). The Cost Structure of Consumer Finance Companies and Its Implications for Interest Rates: Evidence from the Federal Reserve Board’s 2015 Survey of Finance Companies. Retrieved from https://www.federalreserve.gov/econres/notes/feds-notes/the-cost-structure-of-consumer-finance-companies-and-its-implications-for-interest-rates-20200812.htm.

iv Credit Union National Association. (2021, July 15). Proposed ‘all-in’ rate cap would reduce access to credit. Retrieved from https:// news.cuna.org/articles/119673-proposed-all-in-rate-cap-would-reduce-access-to-credit.

v North Carolina Office of the Commissioner of Banks (2018). Consumer Finance Annual Report. Retrieved from https://www.nccob.gov/Public/docs/News/Pub%20And%20Research/2018_Annual_Report_Final.pdf.

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Las Cruces Sun-News opinion piece: It’s time to finally eliminate Social Security tax

LAS CRUCES SUN-NEWS - Downtown Las Cruces Partnership

In the wake of Gov. Lujan Grisham’s State of the State address, Republican House Minority Leader State Rep. Jim Townsend, said that during the speech he thought the governor “almost became a Republican.” He’s not wrong.

After three full years and legislative sessions (not to mention multiple special sessions and the constant invocation of her “emergency” powers) of governing as a hard left “progressive,” the Gov. seems to be tacking to the center in advance of her reelection bid this fall. This may be both good policy as well as good politics.

Specifically, in her State of the State address Lujan Grisham announced that she wants New Mexico to stop taxing Social Security. New Mexico is one of just 13 states in the nation to do this and bi-partisan efforts have been made in recent years to eliminate or vastly reduce the tax.

Her support for repeal is welcome, but many “progressives” in her own party seem skeptical. As of this writing one Social Security tax repeal failed on a tie vote in the House Labor Committee. Only one Democrat and three Republicans endorsed the idea. So, Social Security tax repeal is by no means a “done deal.”

This is true even though the state has plenty of money, as evidenced by the Gov.’s ambitious budget which contains a 13.5% spending increase over last year. The $80 million or so in “lost” revenue from ending the tax is a drop in the bucket when compared with the flood of new revenues. This is a flood that seems likely to continue with high oil prices and record production in the Permian Basin. So, New Mexico has plenty of money to cut taxes. In fact, the Gov. and Legislature should be looking for ways to use this flood of new money to both cut and reform taxes in ways that help diversify the economy.

While the decision to eliminate the Social Security tax is welcome, this is not the first time the Gov. has had a large surplus (or budget increase) available. In her first year in office (2019) the budget grew by 11 percent while increasing several taxes including taxes on car sales and hospitals. Bipartisan Social Security tax elimination bills have repeatedly been proposed since then. It certainly seems like the Gov.’s decision has a heavy dose of election year politics. There’s nothing wrong with that, but it is worth noting.

To her credit, the Gov. seems inclined to eliminate the Social Security tax without raising other taxes as one bill introduced this session would do. With the kind of money available, it is hard to justify raising taxes to make up for the small loss of revenue. Worse, a “revenue neutral” bill, introduced by Sen. Bill Tallman, would increase regressive tobacco taxes to make up for “lost” revenue.

Eliminating Social Security taxation should be a straight tax cut for the benefit of New Mexico seniors and those who might consider moving to New Mexico but see our State as “unwelcoming” for retirees due to our tax policies.

This legislative session is indeed an opportunity for the Legislature to “be bold” by enacting transformative policy changes. Reforming the broken gross receipts tax to eliminate taxation of services remains the very best way to do that. However, eliminating an unnecessary tax that makes New Mexico unattractive as a retirement destination is a worthwhile goal and we are hoping for the best and stand ready to support proponents of Social Security tax repeal this session.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility

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Where New Mexico is getting most of its money

Gov. Lujan Grisham has proposed a 13.5 percent increase this year. While ALL states have received massive bailouts in the form of printed money from Washington, New Mexico’s financial windfall is largely generated by the oil and (to a lesser extent) gas industry.

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Best bills of New Mexico Legislature…so far

Despite there being A LOT of bad bills in the 2022 session even with only 30 days to consider them, there ARE some good bills. Here are some of the BEST bills introduced so far. We’ll also “handicap” the likelihood that each bill will pass:

HB 40/HJR 3: Reps. Greg Nibert (R), Daymon Ely (D), Randall T. Pettigrew (R), Stefani Lord (R), and Rachel A. Black (R). This bill/amendment would place limits on the Governor (whoever that may be) and give the Legislature a “seat at the table” in future emergencies. Unfortunately, while similar bills were introduced in the 2021 session which lasted 60 days and a recent special session, this worthwhile bill which has bipartisan sponsorship has a LOW chance of passage.

HB 48/HB 49/SB 108 These bills introduced by Reps. Gail Armstrong (R), Cathrynn N. Brown (R), Randall T. Pettigrew (R) , Candie G. Sweetser (D), Rebecca Dow (R), and Sen. Padilla (D) would end taxation of Social Security under New Mexico’s personal income tax. This issue has been around for a few years, but Gov. Lujan Grisham has said that she supports eliminating the tax. We don’t know EXACTLY what she means (like if she’ll raise other taxes to do it), but these bills DO NOT offset the tax with new taxes. MODERATE chance of passage.

HB 76/SB 85  Reps. Phelps Anderson (I),  Harry Garcia (D)
T. Ryan Lane (R), Joy Garratt (D), Jane E. Powdrell-Culbert (R), and Sen. Harold Pope (D) would give a $30,000 exemption for military pensions. This bill is a worthy follow-up to the Social Security discussion, especially with New Mexico’s large number of ex-military. But, it is unlikely to happen this year. 

HB 91: Reps. Rebecca Dow (R),  Luis M. Terrazas (R),  James G. Townsend (R),  Candy Spence Ezzell, (R), and  Randall T. Pettigrew would prohibit the teaching of Critical Race Theory in New Mexico schools. It is unlikely to pass this year.

HJR 11: Reps. James G. Townsend (R), Ryan Lane (R), Larry Scott (R), Rod Montoya, (R), and Stefani Lord (R) would amend New Mexico’s constitution to specifically allow school funding to flow to families to choose the education option that makes sense for them which may include private schools or home school. Zero Chance of Passage until the unions no longer control New Mexico’s Legislature and Gov.

SB 5: Sen. Bobby Gonzalez (D), reduces the Gross Receipts Tax rate imposed by the State of New Mexico from 5.125% to 4.875 percent. This WAS a top priority of the Gov. prior to the session, but when she asked the Legislature to eliminate the Social Security tax in her State of the State address she seemed to shift emphasis away from reducing GRT rates. We still believe this has a High Chance of Passage.

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Here are some early contenders for worst bills of the 2022 Legislature

As of the day before the 2022 Legislature kicks off, here are some of the worst bills introduced in the session (so far). You can see the updated list of bills introduced in the session here as of January 17, 2022. More will be added. Given the large number of bills likely to be introduced, I’ll also offer a brief thought on how likely they are to pass:

HB 6, Reps. Nathan Small (D) Brian Egolf (D), Kristina Ortez (D), Sens. Siah Correa Hemphill (D), Mimi Stewart (D). Sets legislative framework for “net-zero” CO2 emissions in State of New Mexico. Likelihood of passage: High as Gov. MLG has said she wants to make New Mexico “net-zero.”

HB 11, Reps. Debra Sariñana (D) and Meredith Dixon (D). Creates a tax credit of up to $5,000 and 40% of the cost of “energy storage” systems. Likelihood of passage: High This yet another part of the push toward unreliable forms of electricity that will demand massive and costly battery storage.

HB 14, Reps. Christine Chandler (D) and Debra M. Sariñana (D). Allows local governments to issue Industrial Revenue Bonds (IRB) and gross receipts tax deductions for “energy storage” systems. Likelihood of passage: High(see above).

HB 33, Rep. Joanne Ferrary (D). Imposes massive (regressive) tax hike on tobacco consumers at a time of massive budget surpluses. Likelihood of passage: Moderate (it will hard for legislators to explain a tax hike at a time of record budget surpluses).

HB 34, Rep. Joanne Ferrary (D). Expands and extends an already-generous solar panel tax credit that disproportionately benefits wealthy New Mexicans. Likelihood of passage: High (furthers “green” agenda and benefits well-connected, wealthy solar customers and companies).

HB 71, Rep. Matthew McQueen (D) and Jason C. Harper (R). Allows taxes on residential property to rise by up to 10% ANNUALLY (as opposed to 3% currently). Likelihood of passage: Moderate (Property taxes are notoriously unpopular and it is hard to see the Legislature passing a big tax hike in an election year, even with a GOP co-sponsor).

HB 75, Rep. Sponsor Patricia Roybal Caballero (D). Sets up a state-run bank in New Mexico. New Mexico already has a robust network of banks and credit unions, the last thing it needs is a government-run and taxpayer-financed bank. Likelihood of passage: Moderate this is a concept likely to be seen as too far beyond the pale even for many Democrats.

HB 78 and HB 132 Rep. Patricial Roybal Caballero (D) is on HB 78 while HB 132 is more likely to pass and sponsored by Rep. Susan K. Herrera, Speaker Brian Egolf, Reps. Joy Garratt (D), Phelps Anderson (I) and Daymon Ely (D). Both bills create artificial limits on interest rates charged by certain lenders in New Mexico that will limit credit availability to those with poor or no credit. Likelihood of passage: High (HB 132) as this concept has numerous groups supporting and high-interest loans are misunderstood and by legislators, the media, and the population at large.

HB 126, Reps. Tara L. Lujan (D) and Pamelya Herndon (D), Creates all manner of “diversity” requirements for state government employees, creates a “Chief Diversity Officer” as well as “diversity” and “inclusion” liaisons in State government, requires an annual report on whether the State is achieving its diversity and inclusion goals. Is New Mexico State government not “woke” enough? This legislation is for you. Likelihood of passage: Moderate.

HJR 2 / SJR2 Reps. Joanne J. Ferrary (D), Tara L. Lujan (D), Gail Chasey (D), Sens. Antoinette Sedillo Lopez, (D), Harold Pope (D). Purports to provide the people of New Mexico with vaguely-defined “environmental rights” includng the right to a “clean and healthy environment and the “right to protction of the environment.” The vague provisions contained in this amendment will simply result in more expensive lawsuits and unnecessary regulations. This is a Constitutional amendment and extremely vaguely worded which might scare away supporters.  Likelihood of passage: Moderate.

SB 8, Sens. Peter Wirth (D),   Katy M. Duhigg (D), Harold Pope (D) Carrie Hamblen (D), and  Rep. Javier Martínez (D) would “reform” voting in New Mexico by allowing 16 and 17 year olds to vote, creating a permanent absentee voter list, and permitting people without an official state ID to register to vote online by using their full Social Security number. Likelihood of passage: High

SB 21, Sen. Bill Tallman (D), Provides a tax subsidy for electric vehicles which tend to be driven by wealthy New Mexicans and is thus “regressive.” If there is one policy area where New Mexico’s Legislature loves to pour subsidies it would be for supposed “green” initiatives. Likelihood of passage: High

SB 99, Sen. Leo Jaramillo (D), Creates a new “State Transit Fund” to further funnel money from state taxpayers to failed transit projects. This is a new idea this session, but with so much money floating around there is always reason to be concerned about new wasteful spending. Likelihood of passage: Moderate

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RGF discusses Gov.’s budget on KOAT 7

RGF president Paul Gessing recently sat down with Channel 7 KOAT to discuss  the Gov.’s budget. The original interview covered a variety of issues within the budget but wound up being JUST about the law enforcement component.

While most New Mexicans, especially those in crime-plagued Albuquerque, support the hiring and retention of law enforcement, Gessing was actually referring to the fact that Gov. MLG’s budget has a “slight” increase in funding for Department of Corrections while the Legislature’s budget CUTS funding. The assertion is that New Mexico’s prison population is declining and therefore less money is needed.

It is all well and good to cut funding for corrections, but with violent crime at record levels in Albuquerque, it would seem like violent offenders should be filling up those prison cells…but perhaps the courts are not doing THEIR jobs? Either way, that conversation was left on the proverbial cutting room floor. Click on the image below for the story.

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Gov.’s attempt to claim role of ‘tax-cutter’ laughable

The following op-ed appeared in the Las Cruces Sun-News on December 28, 2021.

Recently, Gov. Lujan Grisham posted on Facebook in support of her plan for a small .25 percentage point reduction in the State’s gross receipts tax rate, saying, “Lower taxes would enable them to grow their business and hire more people, including local adults with special needs that they focus on employing – and we’re going to make it happen.”

It sounded almost like something we at the free-market Rio Grande Foundation would write and

the Gov.’s statement is true as far as it goes. While we support ANY effort to lower tax burdens on New Mexicans, Lujan Grisham’s plan for a small .25 percentage point reduction in the State’s GRT is totally inadequate and clearly driven by her coming reelection and the fact that she faces a very tough race.

According to the Gov., her plan would cut taxes by $145 million annually. But since she took office, Lujan Grisham has signed tax hikes totaling more than $250 million annually. She also conveniently omits the fact that the oil and gas industry has created a $1.6 billion surplus, the likes of which New Mexico has never seen. Clearly given the economic trials facing average New Mexicans, we deserve much more than a tiny tax cut that fails to even make up for her past tax hikes.

The very same thing the Gov. claims about lower taxes helping people grow their businesses were said in opposition to tax hikes she signed into law in 2019 (HB 6) and 2021 (SB 317). Among the tax hikes passed in these bills were hikes in personal income, motor vehicle, hospital, and health insurance taxes. Clearly, as with gross receipts taxes, much of the burden of these tax hikes is also borne by businesses and affects their ability to hire and grow their businesses.

Worse, none of these tax hikes were necessary. The 2019 tax hikes were passed at a time of record budget surpluses alongside an 11 percent budget increase. The 2021 tax hike was a blatant revenue grab. The Democrat-controlled Legislature and Gov. Lujan Grisham were presented with an opportunity to generate millions of additional tax dollars by re-imposing (and retaining the proceeds from) a federal health insurance tax that had been repealed by the Trump Administration.

Simply allowing the federal government’s health insurance tax (imposed under ObamaCare) to go away would have had the very same positive impacts on businesses and their bottom lines as any other tax reduction, but that wasn’t an election year. This is.

Directly imposing higher taxes is only one of numerous ways in which government makes doing business harder than necessary. In her time in office Lujan Grisham signed a new medical malpractice law that doctors and other medical professionals say will cause them to close or leave. The Energy Transition Act has already begun increasing electricity costs and PNM is concerned about reliability as soon as next summer due to the closure of San Juan Generating Station.

While the Gov. is busy positioning herself as a pro-business “tax cutter” she is also pushing a new “Clean Fuel Standard” that, based on a draft of the bill, would increase gasoline prices by 35 cents per gallon. Every New Mexico business and resident (even if they drive an electric vehicle) would see further price hikes above and beyond current inflation if that bill becomes law.

Sadly, the impact of these anti-business law is to keep New Mexico poor. It is no surprise that New Mexico has one of the highest unemployment rates in the nation despite the massive oil and gas surplus.

Lujan Grisham’s management of New Mexico’s economy both before and throughout the Pandemic have been abysmal and her claim to be a pro-business “tax cutter” are laughable.

Paul Gessing is president of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, nonpartisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility