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A creative headline writer described the employment packages offered by Democrats and Republicans as “Dueling Job-Growth Plans.”
To have a duel, the guns must be loaded. That’s one little detail Senate Dems forgot.
In a news conference, they trotted out SB 9, yet another stab in Sen. Peter Wirth’s long campaign for combined tax reporting, which employers say would cost jobs; SB 74, from Sen. Steve Fischmann, who has an untarnished track record for being clueless on economic issues; and Senate Majority Leader Michael Sanchez, whose SB 140 is unworkable.
Fischmann would have us believe he’s fighting the good fight against tax pyramiding, in which gross receipts taxes stack up as businesses buy from each other and become embedded in the final, higher price. Behind his corporate income tax credit lies a mandate for combined reporting of corporate income taxes (a company pays tax on a fraction of its nationwide income, rather than just what it earned in New Mexico.
The argument over corporate taxes isn’t new. Political Progressives like Fischmann and Wirth claim New Mexico loses millions through what they call a tax loophole. Business groups say a change like the ones proposed would create a hostile tax environment that would drive business away.
I once heard a tax expert say there’s a middle ground, a step that would address all their concerns, but it never seems to surface as a bill.
In SB 140, Sanchez dangles an investment tax credit for manufacturing equipment that requires the employer to increase wages.
Eight other bills in the package range from good ideas (a tax credit for hiring New Mexico graduates, more funding to the Small Business Investment Corp.) to pointless exercises in red tape.
Some of these lawmakers must think employers are trick ponies to be manipulated by carrot and stick – mostly stick. They still don’t understand that the state simply needs to create a friendly business climate.
Other lawmakers have introduced perfectly good proposals – including Senate Dems who had the good sense to not join the Sanchez-Fischmann posse. There are also a number of bipartisan measures.
A committee hearing on the Job Training Incentive Program was downright exuberant. The governor wants $10 million for the program that underwrites part of the training costs for new workers at qualifying companies. The bill is carried by House Speaker Ben Lujan and House Minority Leader Tom Taylor.
Everybody loves the program and the bill – Republicans and Democrats, administration and lawmakers, labor and business. That’s been the case since JTIP hatched in 1972.
If everybody loves it so much, why isn’t it a budget item in the Economic Development Department? That’s a repeated proposal, but it would deprive the above players of their opportunity to stand up and declare their devotion to economic development. So it’s become a ceremony, and the bill is always carried by the Speaker, a tradition that began with former Speaker Raymond Sanchez.
It’s a lovely tradition, except for the years when the bill gets lost in the shuffle and there’s no funding. (I once gave my publisher some grey hair when we reported the bill dead while everyone else reported it passed. When Sanchez checked, to his surprise, his bill had failed.)
The Association of Commerce and Industry has always been a good barometer of business sentiment. Check ACI’s legislative agenda (http://www.aci-nm.org/), developed with input from chambers of commerce statewide.
It includes repealing greenhouse gas regulations, funding the Job Training Incentive Program, the single-sales factor in the multi-state tax apportionment formula for corporate income tax, Medicaid reform, a solvent unemployment insurance fund, regulatory reform, and development of diverse energy resources.
Aside from the tax stuff, this isn’t rocket science. Want to spur employment? Go talk to the people who do the hiring.
New Mexico News Service