The three revenue measures described below are on the temporary House
calendar for today and may well be heard on the House Floor as early
as this afternoon. If not debated today, the measures will
certainly be taken up tomorrow. The passage of these three
measures is necessary if we are to keep education funding intact and
avoid the pay and other cuts originally proposed by the Legislative
Finance Committee.
House Bill 9, sponsored by committee chair Representative Ed
Sandoval, received a do-pass recommendation late Monday in the Taxation and Revenue Committee. Under the proposed legislation, personal income tax
rates would be increased by 1.5% percent on taxable income in excess of
$200,000 (married joint and head of household filers), $133,000
(single) and $100,000 (married separate). The increase would apply
only in tax years 2010 through 2012. It would provide, as amended in
the committee to a 1.5% surtax, some $66 million
to the general fund next year.
A committee substitute for house Bill 119, TEMPORARY GROSS RECEIPTS INCREASE, sponsored by Speaker
Ben Lujan received a do-pass recommendations from the Taxation and Revenue Committee late Monday as well. The
substitute fixes some concerns that cities and counties had with the
bill. House Bill
119 temporarily increases the state gross receipts and
compensating tax to 5.5 percent in FY11, 5.375 percent in FY12, 5.25
percent in FY13, 5.125 in FY14 and returning the tax to the current 5
percent rate in FY15 and beyond. The measure raises $238 million
next year and $189 million the year after that. This goes
a long way toward raising the funds needed for public education.
House Bill 120, TAX WITHHOLDING CHANGES,
also sponsored by Speaker Lujan received a do-pass recommendation from the
committee, also. This bill would raise some $16 million by
requiring out of state residents to pay taxes owed on mineral
royalties earned in New Mexico by forcing the pass-through entities
that collect the royalties to withhold the taxes; the measure imposes
no new taxes and forces compliance with existing law. The three
measures provide more than $300 million in new revenues to be added to the general fund to
prevent further cuts to education and prevent salary cuts to all
public employees. Without these bills the proposed House budget
simply cannot be passed.
All three votes were on straight party lines, 10-yes
and 6-no, all Republicans voting to refuse to raise revenues,
and thus by necessity, cut public schools drastically. All
Democrats voting to support public schools with the necessary revenues
to prevent cuts!
Budget Bill on House Temporary Calendar Today
That budget, House Bill 2, the General Appropriations Act, received a do
pass recommendation
in the House Appropriations and Finance Committee yesterday morning.
The vote was on straight party lines, with democrats supporting the
bill and its maintenance of public school funding and republicans
opposing the budget. The bill now moves to the full House and is
on today's temporary calendar and may well be heard on the House Floor
as early as this afternoon. If not debated today, the measures
will certainly be taken up tomorrow.
The proposed budget for Education includes $2.5 billion
in state and federal aid for public education next year. That's a
slight decrease of about one-half percent over this year's total spending on
schools, the Public Education Department and other education programs.
A budget much different for the massive cuts proposed by the
Legislative Finance Committee before the legislative session.
It is clear that these budget recommendations will depend on lawmakers
raising taxes.
New Mexico (like most other states) has been relying on federal economic stimulus money to
avoid deeply cutting public schools during the recession. About $210
million in federal aid will go to schools this year, replacing state
tax money that otherwise would be needed for education. However, the
federal money is going away. Schools would get about $24 million
in federal stimulus aid next year (all that's left after this year's
funding). An increase of $165 million in state aid fills the gap
left by federal funding available this year, but not next year. The
budget as proposed provides these funds without further cuts to public
schools.
Budget and Tax Bills Must Move Together
House Bill 9, House Bill 119, and House Bill 120 must all be passed as
the budget bill in passed in order to provide a budget that does not
cut public schools and public employee salaries. Please ask all House Members to support both a budget that does not cut education
and the necessary revenue bills to support that budget!
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