Reckless and wrong: The long-term damage of Gov. Martinez’s higher education veto

Reckless and Wrong

 

On April 7, 2017, Gov. Susana Martinez vetoed the entire state budget for higher education. Every cent for every college and university in New Mexico.

Seriously.

A special legislative session, costing taxpayers $50,000 a day, had to be called in May to fix the governor’s veto mess. But Gov. Martinez’s reckless veto left long-term damage. 

New Mexico State University President and former Republican Governor Garrey Carruthers has a unique position to understand the impacts of the governor’s actions. He spoke out harshly against Gov. Martinez after her veto:

“The message the [Martinez] veto sent to our 133,505 registered students and their families…leaves them confused and wondering whether they should enroll in a New Mexico college or whether they’ll be able to finish their degree and graduate.

We’ve worked hard to recruit high-quality faculty members to our institutions, yet some are now looking at employment where there is more certainty in higher education. 

When someone’s looking to locate a company here and they see this kind of an occurrence, one would have to wonder about the political environment and whether this is a place their company might be comfortable.” [1]

And President Carruthers was quoted in the Washington Post saying:

“I’m concerned that NMSU and the state’s other universities now appear to be caught up in a political strategy.” [2]

 

The Elephant in the Room

 

Gov. Martinez’s real priority is pushing through even more tax breaks for those at the top. 

Since Susana Martinez became governor, devastating funding cuts have meant skyrocketing college tuition and loss of critical faculty and teaching jobs.

But New Mexicans get it, even if Gov. Martinez doesn’t. We understand that investments in higher education create ladders of opportunity that lead to good-paying jobs and help develop the kind of workforce that attracts high-paying jobs and keeps our young people in New Mexico.

When confronted with these decisions our policy makers must make sound decisions about responsibly raising revenues for the state while avoiding Gov. Martinez’s strategy of shortsighted tax breaks for the wealthy and well-connected.

 

SOURCES:

[1] Carruthers, Garrey. “Unintended message a bad one.” Guest column. Albuquerque Journal, 16 April 2017.

[2] Strauss, Valerie. “New Mexico Gov. Martinez vetoes higher education funding. All of it.” Washington Post, 17 April 2017.



Seriously??

 

Earlier this year, Governor Susana Martinez did something no one could believe. She vetoed the entire higher education budget for the state of New Mexico. Every dollar for every college and university in the state.[1]

Seriously.

This drastic move sent shockwaves throughout the state and did damage to our education system before the legislature stepped in to fix her mess. The legislature restored the funding, but only after New Mexico’s college students were used as pawns in a “political strategy.”[2]

 

Shockwaves throughout New Mexico

 

The veto threw our colleges and universities into crisis mode. The President of New Mexico State University feared that “many of our state’s brightest students will move to other states to pursue their higher education” because of the governor’s decision to strip every dollar from it.[3]

LEARN MORE: NMSU President Garrey Carruthers criticizes Gov. Martinez’s higher ed veto

The economic implications could have been dire too — some high-quality faculty members began looking for jobs in states with more certainty in the higher education system and businesses looking to locate in a state that values education may have reconsidered their options.

The Chronicle of Higher Education echoed that view: “The budget situation in New Mexico has drawn national attention that could make any educator considering working in the state balk.”[4]

Education — and higher education in particular — is the backbone of any well-trained workforce and, therefore, essential to a thriving economy.

As Armelle Casau, PhD, a research and policy analyst with New Mexico Voices for Children, put it: “Anyone given a chance to make an investment that is guaranteed to give a positive return year after year would do it…Public higher education is one such investment because it improves the workforce and helps families get out of poverty, both of which grow the state’s economy.“[5]

Yet, in New Mexico, Gov. Martinez has overseen deep cuts to public higher education.

According to the Center for Budget and Policy Priorities, New Mexico slashed its investments in public higher education by 30% between 2008-2016 (on a per-pupil, inflation-adjusted basis).[6] More cuts were made for 2017-2018, too.

LEARN MORE: Investing in education pays off economically, but New Mexico’s schools are chronically under-funded

 

 

Out-of-touch with New Mexico values

 

New Mexicans understand the value of having a great education system. Education allows hardworking New Mexicans to create more opportunities for themselves. The investments in education we make now translate into a better quality of life for our children as they grow into adults and look to start a life.

We know many of our young people already struggle to stay in New Mexico after graduation because they can’t find jobs. But better economic prospects are directly tied to the quality of our education system. And the quality of our education system is directly proportional to the investments we make in it.

We need leaders who value education and will fight for it, not use it as a pawn in a political game like Gov. Martinez did.

We know that investments in higher education:

  • Create ladders of opportunity that lead to good-paying jobs
  • Develop the kind of workforce that attracts high-paying jobs and will keep our young people in New Mexico
  • Mean our policymakers must make sound decisions about how to raise revenue and use resources to avoid more short-sighted tax cuts

 

SOURCES:

[1] Strauss, Valerie. “New Mexico Gov. Martinez vetoes higher education funding. All of it.” Washington Post, 17 April 2017.

[2] Carruthers, Garrey. “Unintended message a bad one.” Guest column. Albuquerque Journal, 16 April 2017.

[3] Ibid.

[4] Quintana, Chris. “The next higher-ed funding battle to watch may be in New Mexico.” The Chronicle of Higher Education, 19 April 2017.

[5] Casau, Armelle. “Despite recent budget fix, higher education is still underfunded.” New Mexico Voices for Children, 5 June 2017.

[6] Center on Budget and Policy Priorities. “State Map: Funding Down, Tuition Up.” 19 May 2016.

 



Seriously??

 

Gov. Martinez supports a proposal to revamp our state tax system that could blow a $44 million hole in the state budget [1] and raise taxes on New Mexico’s poorest families by 66%.[2]

Seriously.

You’d also start paying gross receipts tax on things you take for granted now, like:

[CLICK TO ENLARGE]

  • groceries
  • textbooks
  • hearing aids
  • nonprofit nursing homes
  • prescription medicines
  • prosthetic limbs
  • back-to-school purchases
  • goods purchased from charities

Click on the graphic from New Mexico Voices for Children to the right for a breakdown of the impacts of the “tax reform” proposal.

Unfair. Irresponsible.

 

The governor’s “tax reform” plan is unfair and irresponsible. Not only will you pay more in taxes on critical things your family needs, but the plan Gov. Martinez supports could blow a $44 million hole in the state budget. That would mean even more funding cuts for our schools, healthcare, and law enforcement.

Under the plan Gov. Martinez supports:

  • Corporations would get a 24% corporate income tax break (this is on top of the huge tax breaks they got in 2013 under Gov. Martinez)
  • Those in the state’s lowest tax bracket (i.e. our poorest families) would see their personal income tax rate rise by 66%
  • There would likely have to be even more funding cuts for our schools, healthcare, and law enforcement because it could blow a $44 million hole in the state budget

There’s a better, more fair way

 

We New Mexicans willingly pay taxes to fund our communities’ needs. Taxes pay for the things that we need in order to prosper and create opportunity for ourselves and our families – education, roads and highways, public safety and public health, and much more.

But we expect our taxes to be fair.

We expect the wealthy and well-connected to pay their fair share. Under the plan Gov. Martinez supports, hardworking families will suffer while well-connected lobbyists and corporations rack up even more tax breaks.

 

SOURCES:

[1] McKay, Dan. “Analysis: Tax overhaul would slash revenue.” Albuquerque Journal, 13 June 2017.

[2] New Mexico Voices for Children. “2017 Special Session Resources.” May 2017.

 

 


 

 

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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Primary Election Day – June 7: Don’t Forget to Vote!

Primary Election day is Tuesday, June 7. Polls open 7 am to 7 pm.

Bernalillo County Voting Convenience Centers:

Doña Ana County Voting Convenience Centers:

Family-Friendly Businesses

The New Mexico Family-Friendly Business Award was created by the Task Force on Work Life Balance to recognize New Mexico employers and businesses that offer family-friendly employee benefits and promote increasing the number of businesses with family centered polices and work force access to them.

NMTFWLBThe board and staff of the Center for Civic Policy are proud that our organization has been recognized as one of these best practice family-friendly work places.

What are the benefits of family-friendly best practices? Here’s what the Task Force on Work Life Balance has to say:

Best practice employers foster flexibility to achieve a better balance between work and family responsibilities for all employees. From reduced absenteeism to improved productivity and job satisfaction, there are significant benefits for employees and employers in providing flexibilities for work and family balance. Work and family flexibilities ensure employers and employees balance work and family commitments by using employment arrangements that help employees manage family and lifestyle commitments while taking into account business needs. The benefits of work and family flexibilities can be achieved in all workplaces, regardless of the size of the business, by developing and implementing family-friendly workplace policies.

Our baby steps toward expanding early childhood services are not getting us far

By Bill Jordan, MA, is Senior Policy Advisor/Governmental Relations for NM Voices for Children

Thousands of adorable and inquisitive youngsters are trotting off to school for the first time this month.

From all around the state these wide-eyed kiddos are beginning their school adventures. In honor of this new class, we thought we’d look back at how New Mexico prepared them for school, and look forward to how babies born this year will fare in their preschool years.

In 2010, the year this new class was born, 30,733 of New Mexico’s children were enrolled in the state’s early childhood programs that help children prepare for school: home visiting, pre-kindergarten, and child care assistance. If you think that sounds like a lot, it’s actually only about a quarter of all our preschoolers. Think that’s bad? It gets worse.

Despite all the legislative activity around early childhood services, only 28,701 children—or about 2,000 fewer—are benefiting from these same early learning programs this year. Enrollment has increased for both home visiting and pre-K—and that’s great—but nearly 8,000 children have been dropped from the child care assistance roles. That’s especially troubling because that’s the program that serves children for most of their preschool years. While home visiting focuses on the first year or two of life, and pre-K serves only four-year-olds, child care assistance serves kids throughout their preschool years.

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How Corporate Tax Loopholes Compromise Our Future

By Donald Simonson, Ph.D. 

The notion of “paying it forward” is a popular one, and while we may not think about our income taxes as a form of paying it forward, that’s exactly what we’re doing. The public works that we all depend upon today—roads and highways, schools and parks, telecommunications and electrical grids, even courts and prisons—were made possible in part by taxes paid by past generations. And the taxes we pay today won’t just go toward keeping these systems and infrastructure in good repair, they will also be needed to plan for our future and address unexpected issues and opportunities. This kind of long-term vision is the foundation upon which the United States was built.

Our public works and infrastructure don’t just improve our quality of life, they also make our modern economy possible. Savvy American corporations understand that they depend on this infrastructure and that they bear responsibility for helping to pay for it. As the new report Burning Our Bridges (Center for Effective Government) shows, much of our nation’s infrastructure needs could be covered simply by collecting income tax on the profits that several corporations have retained overseas.

Over the last several decades, U.S. corporations have been paying a much smaller share of the nation’s taxes. In the 1950s, corporate income taxes made up more than 25 percent of the tax money collected by the federal government. It has now shriveled to just over 10 percent. Here in New Mexico, corporate income tax revenue is expected to decline by 60 percent.

While their tax bills are down, corporate profits are at record highs. Tax breaks, loopholes, and creative accounting practices are at record highs, as well. The Burning Our Bridges report looks at the loophole that allows U.S. corporations to transfer their profits to other countries that have low tax rates (or no taxes at all). The report juxtaposes the rapid rise of the offshoring of American corporate profits with the plunge in federal funding for infrastructure.

Among some of the report’s disturbing findings:

  • Corporate offshoring tax abuse costs the U.S. Treasury an estimated $90 billion annually.
  • Bringing our nation’s aging infrastructure up to 21st century standards will cost $3.6 trillion over the next five years.
  • Our failure to make these investments will cost us $1.8 trillion a year in travel delays, water leaks and power outages.

Individuals and American businesses must bear the $1.8 trillion cost of inaction together if we allow our infrastructure to continue crumbling and failing. No business wants to lose money because of failing transportation or undependable power, but that is what will happen. Businesses understand it takes investment to ensure future profits and that includes investment in infrastructure. Infrastructure projects are appreciated by economists on the left as well as the right. The question remains: how do we pay for infrastructure, particularly when we’re collecting fewer dollars in income taxes?

New Mexico is facing this same conundrum. Despite the fact that New Mexico has granted hundreds of millions of dollars in corporate tax cuts over the last few years, special interests continue to lobby for more. In fact, in the just-concluded legislative session, a bill that would have cut business taxes passed the House, but not the Senate. The special interests want the Governor to call the Legislature back into a special session to pass those tax cuts. But that’s not all. They also want a capital outlay bill to fund public works projects passed as well.

We can’t have it both ways. If business groups want a state with reliable public works and infrastructure, they must be willing to make investments in it. We all have a duty to pay it forward for future generations. Forward thinking, profit-seeking businesses know they must pay their fair share to help keep our state’s and nation’s infrastructure sound.

Don Simonson is treasurer for the Board of Directors of New Mexico Voices for Children and an emeritus professor of finance at UNM.

This is post originally appeared at New Mexico Voices for Children