Category Archives: NM Legislature


Corporate Tax Giveaway Update: Gov. Martinez’s budget wizard apologizes for misleading legislature

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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.

Our Resident Smart Aleck Talks about ALEC (VIDEO)

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Sarah Kennedy has a feast with all the products made by corporations that dropped their sponsorships of ALEC last week.

Just in case you missed the national furor about the American Legislative Exchange Council over the last week, here are a few links to bring you up to speed:

The Nation: How ALEC Took Florida’s ‘License to Kill’ Law National

NY Times: Embarrassed by Bad Laws

McClatchy: Study: ALEC has ‘secretive influence’ in Missouri statehouse

Common Cause: ALEC Exposed, for 24 Hours

(Special Bonus) Here’s an oldie, but goodie from ClearlyNM about one of ALEC’s interventions in New Mexico:

Kochtopus Bill Has Its Tentacles In The New Mexico Legislature

And speaking of the Koch brothers, this just in from Center for Media and Demoracy: ALEC Gets Support From Koch-Funded Americans for Prosperity

Legislature will have a different look in 2013

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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.

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

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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.

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

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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

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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

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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.