Legislature will have a different look in 2013

By Matthew Reichbach

The state legislature has the potential to look completely different in 2013 following the 2012 elections because of multiple retirements, challenges to incumbents in the primaries and redistricting — and the deadline for candidates to jump into a race has not hit yet.

The retirements began with that of powerful Speaker of the House Ben Lujan (D-Nambe) who announced on the first day of the legislative session that he would be retiring and not run for reelection in November because he is battling cancer and has been since 2009. Lujan finished up the legislative session on an oxygen tank, showing up every day to the session despite many thinking he would need to take days off because of his health problems.

That retirement was the first of many, mostly in the state Senate.

Incumbent Senators Dede Feldman (D-Albuquerque), Mark Boitano (R-Albuquerque), Clinton Harden (R-Clovis) and Vernon Asbill (R-Carlsbad) and Eric Griego (D-Albuquerque) are all not running for reelection. Boitano said he left because he believes in term limits. He has served for four terms. Griego is leaving to run for Congress in New Mexico’s 1st Congressional District.

Several Republicans reportedly are leaving because they are getting primary challengers as a direct result of not toeing the line for Republican Governor Susana Martinez on her key issues.

In the House, retirements are coming mostly to allow lawmakers to run for other political positions.

Thus Rep. Danice Picraux (D-Albuquerque), who is calling it quits after eleven terms is retiring, is an exception.

Rep. Al Park (D-Albuquerque) is giving up his SE Heights seat and chairmanship of the House Judiciary Committee to run for a seat on the Public Regulations Commission.

Rep. Bill O’Neill (D-Albuquerque) is taking a shot at the Senate in the seat left open by the retirement of Feldman.

One-term Rep. David Doyle (R-Albuquerque) hopes to take the senate seat currently held by Sen. John Sapien (D-Corrales).

And Rep. Joni Gutierrez (D-Mesilla) is running for a position on the Democratic National Committee.

This doesn’t even count primary challenges in the legislature. Just today, former Rep. Ben Rodefer (D-Corrales) announced he would challenge Sapien in the Democratic primary. Rodefer lost to Doyle in the 2010 general election for the House seat — setting up a potential rematch between the two, this time for a Senate seat.

And redistricting may cause more changes. The latest map by Judge James Hall pairs Reps. Nick Salazar (D-Ohkay Owingeh) and Thomas Garcia (D-Ocate) in the same district, perhaps prompting a race between two incumbents. Either way, at least one of the long-serving representatives will not be returning to the legislature in 2009.

With all the changes set to happen, political observers will have to consult their seating charts a little more frequently in the 2013 session — but they will have a 60-day session to learn the names of the new Senators and Representatives.

Tik Tok… not just a Ke$ha song! Clock is ticking on Governor’s decision whether to close corporate tax loophole (VIDEO)

Will she or won’t she? That IS the question.

Will Governor Susana Martinez do the right thing and and sign Senate Bill 9 into law, closing the tax loophole for Big Box out-of-state retailers and give New Mexico businesses a fair shake in the bargain? Or… (shudder), will she veto the bill? (See “Countdown to Decision“.)

As Sarah Kennedy explains, time is running out!


To contact the Governor’s office:

Phone: 505-476-2200

Email: http://www.governor.state.nm.us/Contact_the_Governor.aspx


Countdown to Decision: Will a Martinez Veto Keep Corporate Tax Loophole in Place? (VIDEO)

Sitting on Governor Susana Martinez’s desk awaiting her signature is Senate Bill 9 — the Combined Reporting Act. It’s a long-needed tax reform that will help level the playing field for New Mexico businesses confronted with competition from those out-of-state corporate Big Box stores that are currently allowed to skip out on paying income taxes on the profits they rake in selling goods to local consumers.

The 20-day post-session deadline for Martinez to act on the bill is fast approaching. Much to the dismay of the New Mexico small business community, the smart money has Martinez vetoing this common sense reform. Say it ain’t so, Susana!

As usual, Sarah Kennedy nails the problem in her latest video:


That’s not all. Even the Albuquerque Journal editorial board has come to its senses on SB9. Here’s what a recent editorial from the morning daily had to say:

Editorial: Corporate Tax Change Could Benefit the State

Wedneday, Feb 15, 2012

New Mexico is known for going it alone, often with negative results. For example, take the recently struck down cap and trade regulation imposed during the Richardson administration.

New Mexico is the only Western state with a corporate income tax that doesn’t require big businesses that are based in another state to file corporate taxes here using “combined reporting.” That means such corporations would have to combine earnings from all of its subsidiaries, regardless of location, and pay New Mexico corporate income tax based on a portion of its combined earnings. Businesses now have the option of filing state taxes on income related to in-state operations or on its combined corporate income.

Proponents of combined reporting say the current code allows corporations to shift income to states with lower tax rates to reduce liability.
For the past few years, legislation to change what proponents call a tax loophole has been introduced but has failed to pass.

This year’s version, SB 9, sponsored by Sen. Peter Wirth, D-Santa Fe, would lower the top corporate tax rate from 7.6 percent to 7.5 percent, to offset the requirement that more corporations pay taxes to the state. The bill was amended so that only “big box” retailers – stores of more than 30,000 square feet under one roof – would have to file with combined reporting.

Opponents have argued the change would discourage big businesses from locating in New Mexico. However, amendments adopted this year address that, for instance, by exempting manufacturers like Intel. In fact, it targets retailers like Walmart and Target that will locate here in any case because there is a customer base for their products.

If the change will lower corporate income taxes across the board and make the tax code more equitable, it merits serious – and nonpartisan – consideration.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.

ABQ City Council Redistricting Plan Passes on 5-4 Vote

By Matthew Reichbach

The Albuquerque City Council approved a redistricting map that will eliminate Commissioner Ike Benton’s district, which includes Albuquerque’s downtown area, and move it to the fast-growing westside part of the city. The map, which passed on a 5-4 party-line vote, uses the Rio Grande as a border.

Benton would be paired with Debbie O’Malley in a district that includes downtown and the North Valley areas of Albuquerque.

The map goes to Mayor Richard Berry who is likely to sign the redistricting map — but the battle likely won’t end there, as opponents say the map “packs” minorities in one district, diluting the minority voting strength, which would violate the Voters Rights Act.

The newly created Westside district, while expected to still be friendly to Democrats, would have a super majority of Hispanics — 82 percent. This is why opponents of the map say that the city council “packed” the district with minority voters at the expense of other districts. According to the U.S. Census, Albuquerque is 46.7 percent Hispanic.

Opponents also pointed out that with consolidation of most of the old District 3 into O’Malley’s North Valley District 2 will mean that almost all of the city’s federally designated “pockets of poverty” will be contained in a single district.

If opponents so choose, the redistricting map could join the New Mexico House of Representatives map in the courts, drawing out the process further. Insofar as the next Albuquerque municipal election is not until 2013, however, there may not be a great sense of urgency on the part of the courts in finalizing a new council map. This would be in sharp contrast to the legal battle involving the N.M. state House of Representatives map as the clock is ticking away with an impending primary election scheduled for the first Tuesday in June.

The big winner of the new map is Albuquerque’s Westside, which would have three full districts, an increase of the current two districts and a part of another.

O’Malley introduced a competing map, which was tabled, which would have extended borders across the Rio Grande and kept all five current city councilors in their districts. Opponents of that map say they preferred that the Rio Grande be used, when possible, as a natural border for districts, something that O’Malley says is divisive for the city.

The City Council said that Benton would be allowed to continue serving until his term ends in 2013, but court action could force Benton from his seat. In that case, the mayor would be allowed to appoint a replacement, likely increasing the Republican advantage on the city council from its current 5-4 advantage to 6-3.

Odds and Ends

  • Republican City Councilor Dan Lewis, the map’s sponsor, said before the hearing that the map was neutral because it was based almost entirely on a map created by Research & Polling. Ironically, Republicans involved in the state House redistricting case have made an major issue in their court filings of what they allege is the Democratic bias of the very same Research & Polling and its owner, Brian Sanderoff, which also performed the technical mapping work for the  state legislature.

Liveblogging the Final Day

Countdown to adjournment at noon. Here’s the Roundhouse liveblog, courtesy on NMPolitics.net.

Closing the Big Box Loophole: House passes Combined Reporting, sending it to the Governor and an uncertain future

By Matthew Reichbach

After years of not being able to even clear committee, the combined reporting bill of Sen. Peter Wirth (D-Santa Fe) cleared the legislature and headed to Governor Susana Martinez’s desk. There, the bill faces the looming guillotine of a promised veto.

The bill passed the House on a 36-33 vote with just minutes before the clock struck midnight on Wednesday night.

If it is signed into law, the bill will require “big box” companies like Wal-Mart and Best Buy to use combined reporting of their income for tax purposes. This would mean these out-of-state corporations would have to pay income tax on the profits earned in New Mexico.  In addition, the bill lowers the top corporate tax rate to 7.5 percent from the current 7.6 percent to maket he measure revenue-neutral.

Rep. Paul Bandy (R-Aztec) was the lone Republican to vote for the legislation. Rep. Dianne Hamilton (R-Silver City) missed the vote. Rep. Andy Nunez (I-Hatch) voted against the legislation. Rep. Kiki Saavedra (D-Abq) was the only Democrat to vote against the the measure.

Rep. Brian Egolf (D-Santa Fe) carried the bill through the House for Wirth and faced a grilling by opponents of the measure on the House floor.

In it, he said it would put local businesses like Baillio’s on equal footing with the out-of-state corporations like Wal-Mart and Best Buy.

Rep. Conrad James (R-Albuquerque) said he did not believe that this would close a loophole because there was no loophole — just businesses filing their taxes in the legal way.

“To me, that’s not a loophole,” James told Egolf. “That’s just how the tax system is configured.”

Egolf disagreed, saying, “it allows one class of corporation to take advantage of a feature of the rules that is not available to New Mexico’s homegrown businesses.”

All other western states require combined reporting for out of state corporations.

Martinez has promised to veto the legislation, but many speculate that the veto will be a feature of Democratic campaign advertising in the fall.

Wirth has introduced this bill for each of the eight years he has been in the legislature.

Liveblogging till the END!

…the end of the legislative session, that is. (This is not the End Times liveblog.)

It’s live and it’s real. The gang at NMPolitics.net is going all in.  Heath, Gwyneth and our very own Matt “Red Bull” Reichbach, along with the usual cast of journalistic characters, will be liveblogging the N.M. Legislative until the session adjourns tomorrow at noon.

You can follow the action here. Many thanks to Heath Haussamen and Gwyneth Doland for letting us join in.


Jennings says comprehensive immigration reform is needed as Senate passes compromise drivers license bill

By Matthew Reichbach

The state Senate voted late Monday evening to pass a bill that would address fraud and tighten residency requirements for undocumented immigrants to receive drivers licenses. The bill still allows undocumented immigrants to earn drivers licenses, a sticking point that likely dooms the bill in both the House and from Governor Susana Martinez.

The bill passed on a 27-15 vote.

Senate President Pro Tem Tim Jennings (D-Roswell) said that this bill would be effective in stopping the instances of fraud that associated with the program that provides upwards of 80,000 licenses to drivers in New Mexico. New Mexico is one of three states that allows undocumented immigrants to legally drive.

He also said that it is not the place of New Mexico to create immigration policy.

“Our problem is a failed policy of the United States government,” Jennings said in a floor speech. He said the Congress needs to pass comprehensive immigration reform.

Sen. Steve Fischmann (D-Las Cruces) agreed and said, “We keep falling into the trap in our current immigration policy of making criminals out of everybody.”

Sen. Rod Adair (R-Roswell) disagreed, saying, “Drivers licenses are not a right, they are privileges.”

Martinez has indicated that she will not sign a bill if it allows an undocumented immigrant to legally drive in New Mexico. Even a Republican floor substitute brought by Sen. Bill Sharer (R-Farmington) would have failed to meet Martinez’s standard.

Sharer said that his proposed substitute is similar to the Utah system, which allows undocumented immigrants to receive drivers cards that do not function as identification for anything other than driving. In Utah, the drivers cards are clearly different than drivers licenses and state that they cannot be used for identification.

A similar proposal to Sharer’s amendment failed in the House failed on a 33-37 vote.

The Senate bill now heads to the House, where prospects are dim as time runs out in the session which ends on Thursday at noon.

In many ways, the drivers license debate is echoing the debate of last year, as Clearly New Mexico (and many others) previously predicted.

Senate passes budget in late night session

By Matthew Reichbach

Late Monday night the Senate voted 34-6 to send the slightly amended budget back to the House. The Senate debated less than 45 minutes on the budget, showing that the differences in the budget were worked out in the interim and in committees before the budget reached the floor.

Unlike in recent years, the budget passed with bipartisan support and very little controversy. With a budget surplus for the first time in years, the legislators were left to decide how much to be apportioned to tax cuts and new spending, rather than whether to make drastic cuts or raise revenue in the form of taxes.

The Senate added around $5.2 million in funding to the budget. The Senate Majority Caucus wrote about where the extra funding went in a press release sent after the vote:

The appropriations gave funding to projects like drug courts, food banks, adult literacy programs, library services and established a Ben Lujan Cancer Program at the University of New Mexico. Also included are budget funds to eliminate unfair mortgage practices, and job training incentive programs.

The budget leaves about $36 million for tax cuts.

Sen. Rod Adair (R-Roswell) attempted to amend the budget to include priorities that Gov. Susana Martinez outlined in her State of the State address that were not included in the budget, including $400,000 to buy a reading book for all kindergartners.

Adair also introduced an amendment to stop any school district worker from receiving pay while serving in the state legislature as an elected official. This came after an investigative report by KRQE about Rep. Sheryl Williams Stapleton receiving pay during her time as legislator in apparent violation of an Albuquerque Public Schools policy that disallowed administrators from drawing pay while on legislative leave. APS subsequently changed the policy after the story came out.

However, some school districts allow teachers or other school district workers to continue to be paid while on leave serving in the legislature. Sen. John Arthur Smith (D-Deming) said that Adair’s amendment would be an attack on the autonomy of school districts to decide their own rules on the subject.

Adair had four proposed amendments in all. None received a majority of votes.

The bill will now head back to the House where one of three outcomes await it: (1) The bill will be changed some more and then sent back to the Senate. (2) The House will vote to concur with the Senate’s changes. (3) The two chambers will iron out their differences in a conference committee.

But, as has typified the entire budget debate throughout the session, little in the way of drama is expected during the remainder of the budget process.

“Baby Step” for Big Boxes Only: Senate passes limited combined reporting bill

By Matthew Reichbach

The state Senate passed a narrow combined reporting bill (SB9) that would require so-called “big box” stores to pay taxes on income earned in New Mexico. The bill, which tracked the Senate Finance Committee substitute, exempts other businesses like multi-state banks and national fast-food and restaurant chains from combined reporting.

The measure cleared the Senate on a party line vote, with all Democrats voting for the legislation, all Republicans except for one, who was absent, voting for the legislation.

In addition to requiring the big box stores to file taxes using combined reporting, the bill drops taxes on the top corporate income tax rate from 7.6 percent to 7.5 percent. One reason, according to the bill’s sponsor Sen. Peter Wirth (D-Santa Fe), is that the Senate Finance Committee was wary of dropping the corporate tax rate too far in the current turbulent economic times.

There was a long debate on an amendment by Sen. Eric Griego (D-Albuquerque) that would have returned the bill to the original language before it was changed in the Senate Finance Committee. This would have required all out of state corporations to pay their taxes using combined reporting. This, Griego said, would have made sure that entities such as banks would pay their fair share in taxes in the state.

That amendment failed with only five Senators voting for it.

This was the first time that the legislation, which Wirth has carried since he joined the legislature in 2005, has passed the Senate. Wirth made a number of concessions to allow the bill to pass, including lowering the top corporate tax rate and restricting the combined reporting requirement to “big box” stores.

The legislation defines a “big box” store as those ” a unitary corporation that provides retail sales in a facility of more than thirty thousand square feet under one roof.”

Wirth referred to the legislation as a “baby step” a number of times and is a revenue-neutral piece of legislation. He noted that if his bill in 2009, which did not drop the top income corporate tax rate and related to all out of state corporations, it would have increased state revenues by $80 million to $90 million per year according to the fiscal impact report.

Sen. Steven Neville (R-Aztec) disputed the notion that this was a tax loophole that gave out of state corporations an edge. He said that it “is the law of the land of the state of New Mexico.”

Griego said that it was all semantics and they could debate what a loophole really is.

Allan Oliver, CEO of the New Mexico Green Chamber of Commerce, applauded the Senate vote. Oliver said, “This is a big win for New Mexico’s small businesses. This bill lowers corporate taxes for small business, requires ‘big-box’ corporations to pay their fair share and helps our small retail businesses compete on a level playing field.”

Wirth also referred to the bill being one that would help level the playing field for locally owned businesses and used it as an example of why he believed that broader tax reform is needed.

“We’ve got a tax code right now filled with winners and losers,” Wirth said.