Brought to you by Sarah Kennedy:
Back in mid-March during the closing minutes of the 2013 session, the New Mexico House passed a massive corporate tax cut package — with no floor debate and no questions permitted. And, in what most observers believe was an unprecedented breach of protocol, Department of Finance and Administration Secretary Tom Clifford was allowed to take the microphone on the House floor and speak. His budget wizardry was enlisted in a last-ditch attempt to calm the anxieties of legislators.
Why the heartburn? Well for one thing, hardly any of them had had a chance to read the so-called “compromise” bill that had sprung out of Finance Committee the night before. The House Taxation and Revenue hadn’t seen the bill — although it had previously rejected many of its key components earlier in the session. There were legitimate long-term concerns about fiscal impacts of such a far-reaching measure.
This was a bill that would slash the corporate tax rate and replace some of the lost state revenue by pushing the tax burden onto New Mexico counties and municipalities.
But never fear, they said! Tom Clifford is here.
And he won the day with his stand-up routine. The rules of the legislative process were stretched beyond the breaking point. Yet based on his confident assurances, the bill picked up enough Democrats to pass with time having expired on the clock.
Governor Martinez wasted no time in signing HB641 into law. Then her PR flacks kicked into overdrive, spinning the national news media with a tale of New Mexico’s bold Latina Republican governor whose consummate political skill brought an obstructionist Democratic legislature to its senses and got it to pass “her landmark tax reform.” (Subtext: Don’t you know presidential timber when you see it!)
Out-of-state political fundraisers featuring the all-conquering Governor quickly ensued.
Well, the story doesn’t end there.
Yesterday, almost two months after that day of infamy in New Mexico legislative history, we got the rest of the story. From the Albuquerque Journal:
Apology given for tax bill information
By Dan Boyd on Wed, May 15, 2013
SANTA FE – The top budget official in Gov. Susana Martinez’s administration apologized to legislators Tuesday for claiming in March that a massive tax package would have a positive fiscal impact to the state during each of the next five years.
Finance and Administration Secretary Tom Clifford told members of an interim legislative committee Tuesday the information he provided on the House floor during the final hours of this year’s 60-day session was based on a different version of the bill.
“I apologize for that,” said Clifford, who testified on the tax package during the frantic final minutes of this year’s session.
In contrast to Clifford’s original claim, an estimate released after lawmakers approved the tax package calculates that the legislation will cost the state more than $70 million in forgone revenue in the 2017 fiscal year. It will provide the state with about $15 million in additional revenue during the next two budget years before the fiscal impact turns negative, according to the estimate, which does not factor in possible future economic development.
At least one Democratic lawmaker said Tuesday that he did not think the tax package would have been approved by the Legislature if Clifford had originally portrayed the budget hit as negative.
“If he would have told membership the truth, I don’t think they would have voted for it,” said Rep. Jim Trujillo, D-Santa Fe, who voted against the bill.
Read the rest of the story here… and weep.
Sarah says: New Mexico is experiencing one of the worst droughts in history.
Shouldn’t we protect our water, NOT polluters?
Answer the call. Join in. Speak out!
TELEPHONE TOWN HALL
Thurs. May 9th, at 6:00pm
America deserves a common sense immigration process that includes a roadmap for new Americans who aspire to be citizens… take it away, Sarah:
In case you missed it, Governor Martinez vetoed a statewide increase in the minimum wage. Sarah Kennedy had something to say about that:
If you love a good cup of coffee and support fair and just tax policies, you might want to skip this video about what went down in the waning moments of the 2013 New Mexico legislative session. On second thought, you better watch. After all, it’s a Sarah Kennedy joint:
by Stephanie Maez, Executive Director, Center for Civic Policy (Albuquerque Journal OpEd, March 29, 2013)
Shock and awe would be a fair description of the surreal feeling experienced by those who witnessed the waning moments of the 2013 legislative session. That’s when a multi-million dollar tax package suddenly materialized and, with no committee hearing, no debate and inaccurate information as to fiscal impact, roared through its final vote after time had expired.
For its long-term impacts on working families and New Mexico local governments, those final seconds will surely come to live in infamy.
According to a Legislative Finance Committee post session analysis, the bill slashes corporate taxes by at least $215 million over the next four years, while potentially increasing gross receipts taxes for all New Mexicans.
House Bill 641 originally started out as a humble measure with the purpose of making modest changes to the film production tax credit. However, the bill that returned to the House floor minutes before adjournment had become a Trojan horse. Even before this new “omnibus tax package” bill could be handed out to stunned lawmakers, House Minority Whip Nate Gentry (R-Albuquerque) made a motion to shut down debate. Leaving important questions unanswered.
In a major exception to protocol, Gov. Susana Martinez’s secretary of Finance, Tom Clifford, was handed the microphone with five minutes left on the clock and allowed to address legislators in the House. Addressing the bill’s five-year financial impact, he asserted, “the net impact of all of those factors rolled together is a net positive to the general fund in all years.” His word was all that lawmakers had to go on. But it was a lie.
Today the bill sits on the governor’s desk. In a triumphal post-session press conference, she vowed to sign it. Perhaps, it is time we examine what those legislators didn’t have the opportunity to — the fact that on behalf of the governor’s administration, Clifford’s last-minute description of the bill was a farce.
Released three days after the Legislature had gone home, the Fiscal Impact Report plainly states that the bill will reduce general fund revenue by $42 million in FY16, hemorrhaging to $59 million in FY17 and we expect further losses in FY18 after the cuts are fully phased in. And most egregiously, in order to mitigate the overall impact to our state budget, a big part of the losses were off-loaded to local governments.
Many local government officials are scrambling to understand how they will be impacted, since they were not consulted before the bill was passed. Farmington Mayor Tommy Roberts declared that local governments were the biggest casualties of the tax bill, and headlines in Santa Fe, Albuquerque and Las Cruces cried foul.
To pay for Martinez’s cherished corporate tax giveaways, the burden was passed on to local governments. And that in turn will mean either cuts in local fire and police services, or a hike in a tax on everyday New Mexicans — impacting family budgets.
Many legislators warily voted for the legislation because they heard that it included a provision to close a tax loophole that gives out-of-state big box retailers advantages over local businesses. But now it appears that corporate lobbyists succeeded in exempting major corporations including Wal-Mart.
That was just one of the misperceptions about the bill, but it brings us to the essence of the argument.
Trickle-down economics, such as corporate income tax giveaways, have failed our country and they’ve failed at the state level as well. States that are winning the race to the bottom in slashing corporate income taxes (i.e. Texas, Tennessee, and Florida) have actually been doing worse with regard to growing unemployment rates according to the Institute on Taxation and Economic Policy.
What happened at noon on March 16 will go down as one of the low points in New Mexico legislative history. In a shocking move lacking in transparency and accountability, corporations made out like bandits while New Mexico’s working families were left holding the bag.
What’s wrong with this picture? Voters waiting in line for hours to vote in Chaparral and Rio Rancho. Hard-to-update, inaccurate paper-based voter registration systems. It’s little wonder that New Mexico’s voter participation rate is so disappointing. Our elections should be free, fair and accessible to all New Mexicans.
Of course, Sarah has some answers:
(January 21, 2013) So says Sarah Kennedy in this video. Word is that the New Mexico Legislature will consider a measure to hike the state’s minimum wage. Not only is that good news for working families, it will give a much-needed boost to our state’s lagging economy.
You tell ‘em, Sarah!
You can follow the minimum wage fight at the new MinimumWageNM facebook page.
If you love Sarah Kennedy’s videos as much as we do, here’s your chance to weigh in. What was the best ClearlySK vid of 2012?