How tax cuts for the powerful are behind the backlogs

by James Jimenez, executive director of New Mexico Voices for ChildrenAugust 30, 2016

To be safe, healthy, and financially secure is something we all want for ourselves, our children and our families. New Mexico can be a place where communities are safe, people are healthy and thriving, and everyone has the opportunity to build a secure future.

We know what it takes to create strong communities―good schools, roads, libraries, and so forth. Unfortunately, New Mexico has not been making the public investments necessary for this to happen. Instead, we’ve been following the long-discredited trickle-down policy of cutting taxes for the powerful few at the expense of the common good. Worse yet, even as these tax cuts drain the pool of money needed for public investments, some lawmakers are insisting that we need to continue down this counterproductive path.

It seems that every week there is a new story in the newspaper showing the consequences of choosing tax cuts for the powerful over public investment. One of the most egregious, which has a huge impact on public safety, is the backlog of thousands of rape kits with DNA evidence that have not been processed. Each of these kits represents a violent crime, a victim, and a perpetrator. Until we process the DNA evidence the police and district attorneys cannot find, arrest, prosecute, and convict sex offenders. This backlog undoubtedly represents hundreds—if not thousands—of sexual predators who have not only escaped justice, but who have been free to roam our neighborhoods and communities. The Legislature recently set aside some money to address part of this backlog, but lawmakers said there wasn’t enough revenue to do them all.

Another example has serious financial consequences for families trying to make ends meet. The state’s tax department has a backlog of tax refund checks that have not been sent out because the returns have been flagged for more scrutiny. But that scrutiny is slow in coming because, apparently, the department doesn’t have the staff it needs to move these rebates along.

Then there’s the backlog of applications and renewals for the ID cards that patients need in order to purchase medical marijuana. Most patients needing medical marijuana have chronic health problems such as cancer, debilitating pain, or epilepsy. Some are veterans suffering from post-traumatic stress disorder. These patients are willing to spend their own money for a medicinal product that offers them relief, but they can only do so if they have an up-to-date ID. Department of Health officials say they have doubled the number of staff who process these cards—from four workers to eight—and even brought on three temporary workers, but this is clearly not enough. They recently extended expired ID cards, but this is just a temporary fix.

The state’s Income Support Division also suffers from a staff shortage, which had made it impossible for the department to process applications for food and health care assistance in a timely manner. We’ve even recently learned that managers have been falsifying applications for emergency food assistance so the department looks like its meeting its deadline. This has delayed food assistance to some of the hungriest and neediest kids and families in New Mexico.

New Mexico communities cannot thrive if our state lacks the revenue it takes to make these investments―and others―in our well-being. The way forward is for lawmakers to repeal the tax cuts and end the practice of letting the most powerful manipulate the tax code to their benefit. It’s time to focus on what helps all New Mexicans.

James Jimenez, MPA, is executive director of New Mexico Voices for Children and has worked with state and city budgets for many years.

Originally published at NM Voices for Children

New Mexico’s Budget Crisis: “It’s No Laughing Matter” (RADIO SPOT)

With the prospect of a special session of the legislature fast approaching to address a looming budget crisis, the Center for Civic Policy is running this radio ad in selected areas of the state which offers our take on the issue and calls upon constituents to take action:

A thirty-second radio spot can hardly do justice to this fiscal train wreck. A bit of context is in order.

The State of New Mexico faces a serious budget deficit as the result of a shortfall in revenues. Revenue projections made back in January were overly optimistic, it seems. It now appears certain that Governor Martinez soon will call a special session of the legislature to fix a growing budget crisis.

The Governor’s answer is a 5 percent across the board cut in funding for state agencies. New revenues are off the table, she says.

To call this approach unwise would be an understatement. How about unconscionable.

Consider these facts about the quagmire in which New Mexico finds itself:

  • 49th in child poverty
  • K-12 funding is nearly 11% less per student than pre-2008 recession levels
  • 7,000 fewer children fewer children receive child care assistance than in 2010
  • Medicaid was already underfunded this year by $86 million, causing cuts of over $400 million in health care services when lost federal matching dollars are included.
  • Low- and middle-income New Mexicans pay twice the rate in state and local taxes as the richest 1 percent.

We could go on and on.

Low oil prices are cited as the cause of the crisis. But overlooked in the midst of all the hand-wringing, are the horribly irresponsible tax policies enacted in recent years.

The cold hard truth of the matter is this: The Governor is determined to protect her prized corporate tax giveaways by making New Mexico’s working families pay for them.

In 2013 Governor Martinez and the legislature gave huge tax cuts and tax breaks to large corporations, many of them out-of-state. These so-called “business incentives” were supposed to cause an explosion of job creation.

Well, it hasn’t worked. They just took the money and ran.

Today New Mexico has the 3rd highest jobless rate in the nation.

It stands to reason that our continuing underinvestment in education and healthcare is making New Mexico a less than desirable place for companies that are looking for a place to relocate.

A better answer is for legislators to say “no” to more cuts. It’s time to make corporations and the well-connected pay their fair share.

 

What’s really behind New Mexico’s budget woes

By Bill Jordan, senior policy adviser and government relations officer for NM Voices for Children.

Most complex systems — like airplanes, for example — have built-in redundancies. So for a catastrophic failure to occur — such as falling from the sky — there generally have to be several things going wrong. Usually all at once. The state budget is a complex system, too. Sadly, it’s plunging toward disaster. To fix it, we need to look at all the things that are going wrong.

Most news outlets and the pundits they quote have only been focusing on one problem: low oil and gas prices. If we’re going to be successful in fixing this thing before it crashes and burns, we need to look at the other failing pieces. Namely, that the state hasn’t been collecting enough money to cover all of its important expenses like education, health care and public safety.

We’ve been passing big tax cuts since 2003. Tax cuts have been thrown at profitable corporations and the people earning the most money. These tax cuts were supposed to create jobs. They didn’t. Back in 2003, before the recession, this wasn’t so much of a problem. Oil and gas prices were steady and the economy was strong. Today, however, New Mexico’s economic recovery crawls along, we’re still waiting on those promised jobs to materialize, and bargain-basement oil and gas prices don’t look like they’re going back up any time soon. It’s time to take a second look at all those tax cuts.

Let’s start with the personal income tax rate cut for those at the very top of the scale. Since 2003, the wealthiest New Mexicans have seen their income tax rate cut almost in half. These days, for all practical purposes, we have just one income tax rate, and it’s the same whether you earn $16,000 or $16 million. Then there’s the very generous deduction for capital gains income. Capital gains is the money people make on the stock market and in real estate deals. People with capital gains income get to deduct half of that income for tax purposes. When was the last time you got to subtract half of every paycheck from your income tax bill? I’ll tell you when: never.

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