NM Dems Ready to Raise Taxes
According to the Rio Grande Foundation http://riograndefoundation.org tax collections in New Mexico have increased even through the income tax rates are going down. According to Paul Gessing, “New Mexico is collecting more money from its personal income tax than ever before despite having reduced rates by more than 40 percent. In fact, in FY 2003, the year in which the first rate cut – from 8.2 percent to 7.7 percent – took effect, New Mexico’s personal income tax generated approximately $923 million. In FY 2008, the tax is expected to generate $1.18 billion, an increase of 28 percent in just five years. Over the same time period, FY 2003 to FY 2008, New Mexico’s overall tax revenues rose from just under $3.9 billion to $5.9 billion, an increase of more than 51 percent. So, while rate cuts slowed the growth of personal income tax revenues, economic growth made up for a significant percentage of this “lost” tax revenue.”
Here are the income tax rate reductions in New Mexico:
Calendar Year 2002 2003 2004 2005 2006 2007 2008
Tax Rate 8.20% 7.70% 6.80% 5.70% 5.30% 5.30% 4.90%
But the Democrat legislators in Santa Fe are ready to raise taxes, despite the success of economic growth over the past 6 years in which state income tax revenues went up 28%, even though the NM income tax rate as cut from 8.2% to 4.9%.
House Bill 346 is being proposed by Representative Mimi Sewart in response to the budget shortfall being experienced in New Mexico, primarily due the reduction in natural resource taxes (several taxes, oil/gas gross receipts, mining and coal production). So if you are short on revenues, not it is time to raise NM income and gross receipts taxes?
Here is the e-mail update from ACI (NM Chamber of Commerce): HB-346 is being sponsored by Rep. Mimi Stewart and it will be heard by the House Tax & Revenue Committee on February 4, 2009 at 1:30 p.m. (or ½ hour after the floor adjourns) in Room 317. This bill proposes the gross receipt tax rate be increased by .5%. In addition the bill also proposes an increase in the personal income tax rate (PIT). The PIT would increase in tax year 2010 from 4.9 percent to 6 percent for married persons filing jointly with taxable income of at least $24,000 and for single persons with taxable income of at least $16,000. The additional revenue would be earmarked for public education. To track the bill: www.nmlegis.gov/lcs/BillFinder.aspx
This opposition by ACI is not only based on the increase in NM income and gross receipts taxes, but the lack of fiscal accountability for our NM public schools, as many schools do not have audits. Beverlee McClure, CEO Association of Commerce & Industry 2.3.09
For current information on HB 346 (and all of the 2009 NM legislative session), log on to New Mexico Votes www.newmexicovotes.org
Let see. Democrats sponsoring a bill to raise taxes (not cut spending) to help fund education, in which many NM schools do not have audited financial statements (lack of financial accountability). After 6 years of positive revenue growth (partially due to the Governor supported and Roundhouse supported income tax cuts), suddenly we are going to reverse this progress and attempt to raise taxes at exactly the wrong time?
If you can, a call to your NM legislator is in order!