Halfway through the New Mexico Legislature's 30-day session, half of its two chambers is beginning to take its budget-drafting duties at least halfway seriously: The House Appropriations and Finance Committee on Tuesday approved a $5.6 billion budget — one acknowledging the need for tax increases as well as federal aid to bring it into balance.
At the same time, the House Taxation and Revenue Committee, on a 10-6 vote, passed a measure raising the gross-receipts tax by one-half percent. The tax increase is being peddled as a temporary measure — to which House Republicans respond with a sarcastic "oh, right." But the bill's sponsor is none other than Speaker Ben Luján — so there's clout behind it.
But on the Senate side, finance chairman John Arthur Smith packs plenty of pegue, too — and he's insisting on spending cuts before taxes are addressed.
Meanwhile, the half-dozen Republicans voting against Luján's sales-tax boost continue to call New Mexicans' attention to its Achilles' heel: The federal aid on which it counts amounts to chickens before they're hatched. The $203 million in extra support from Washington has yet to be approved by Congress.
If it does get Congress' approval, and Luján's tax passes, the budget still would be out of balance. To cover the remaining shortfall would take an income surtax, and maybe more — all the more "maybe" since the deficit might amount to more than the mere half-billion-dollar amount our legislators are assuming it is.
And how well will higher state income taxes go over in the Senate, not to mention when or if it gets to Gov. Bill Richardson's desk? His stout opposition to soaking the rich, for whom he'd signed tax breaks early in his first term, appears to have softened slightly. How persuasive might Speaker Luján be with the Senate? A ver ...
The budget being the only mandatory order of business of the Legislature in its even-numbered-year sessions, it's encouraging to see hints that the logjam might be breaking up. Luján, whose district includes some poor rural villages, knows that higher sales taxes are tough on those least able to afford basic purchases in the best of times. His bill, HB 119, calls for phasing out the increase, and ending it by July of 2014. If the economy picks up, he should repeal it sooner than that. Meanwhile, Republicans shudder at the notion that, somehow, the increase will become permanent. For now, though, it's a needed show of decisiveness as the Legislature's Feb. 18 adjournment comes into view.
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