SANTA FE — The New Mexico Legislature reconvened Monday for the Special Session with only one thing on the Governor’s Proclamation — the state budget.
Though House and Senate leadership came to an agreement last week, there is still hard opposition from both parties.
“There are primarily two schools of thought here,” said Rep. Dennis Roch (R-Curry). “I think the barriers to getting a budget are no different today than they were weeks ago.”
Sen. John Arthur Smith (D-Deming), who was involved in the upper-leadership budget talks behind closed doors, said the new budget would have several tax hikes. This would include raising the gross receipt tax by a quarter of a cent. This measure would raise about $119 million a year.
Legislators are also considering two versions of a cigarette tax. The first would raise the tax rate by 50 cents per pack, the other 75 cents. At 50 cents per pack the cigarette tax would raise about $24 million, Smith said.
Smith said the legislature is looking to save $100 million in government spending, which would mean a 3 percent cut for state agencies, 2.5 percent cut for higher education and a 2 percent cut for public education.
Perhaps the most controversial revenue enhancement is the food tax, a measure that would put a tax on certain grocery items, like flour tortillas and macaroni noodles.
Though the state does not plan to impose a food tax, lawmakers are considering taking back $17 to $100 million currently given to New Mexico cities. This money is given to compensate for the lost food tax revenue that the state stopped several years ago. The legislature now plans to allow municipalities to tax food up to 2 percent to make up for the dollars they would no longer be receiving.
Rep. Brian Egolf (D-Santa Fe) said the food tax is unpopular in the House. He said House members would rather consider upper income tax changes, which failed in the house during the regular session.
“Thoughts evolve,” he said. “If I am going to be in a position to say I raised your taxes, I want to be able to say I raised your taxes so we didn’t have to cut the schools.”
Rep. Jeff Steinborn (D-Dona Ana), said that although there is still much disagreement, both bodies are working hard to reach a consensus.
“It looks like there is some understanding between the House
leadership and Senate leadership,” he said. “The process now is they are trying to get a buy in from their caucuses.”
Roch said rather than raising revenue to meet spending demands, Republicans would prefer to bring spending demands down to fit within the budget.
“They are still trying to convince people that raising taxes in a tough economy is a good idea. I don’t think it is a good idea,” he said.
Roch said Republicans were not heard during the 30-day session, leaving Democrats responsible for not reaching a budget agreement.
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“When we put forth cost-saving measures and they never make it out of committee, then whose fault really is it for not cutting the budget appropriately?” he said.
Egolf said the legislature’s $50,000 per day operation is only budgeted through Wednesday, but he hopes to reach an agreement in that time frame.
“We convened. If there was no hope then we wouldn’t have convened, we wouldn’t have even started the process,” he said.
