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.