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SANTA FE — New Mexico voters are smarter than many people think. There has been talk recently that no House member is going to vote for a tax increase in the coming 2010 Legislature because all 70 must stand for reelection next year.
Essentially they are saying voters won’t stand for a tax increase no matter what the reason. And yet two polls in the past month indicate a majority of registered voters say they support higher taxes to get us through this period of economic crisis.
Neither poll asked about voting for a legislator who has helped raise taxes, but the implication is that if the tax seems reasonable, voters aren’t going to kick out the incumbent.
Going into the recent special session, some legislative leaders lamented that most lawmakers still weren’t accepting the reality of a state budget in need of major help. A few days later, it appears registered voters were willing to face that reality.
A balanced package of cuts in government spending coupled with sensible revenue enhancements may find favor with voters. People laugh at revenue enhancements being just a politically correct way of talking about taxes.
But there are some ways to raise revenue without raising taxes. The oil and gas industry has a major effect on state revenues. Easing restrictions on drilling would improve the state’s financial condition.
So would the $4-a-gallon gas that national TV ads are forecasting if the federal energy bill passes. That would make us well real quick. We’d have to pay more for gas but with the trade-off of no tax increases.
This column has suggested tapping into the severance tax revenue stream that currently is used to finance pork projects. We could even raid the
$3.4 billion Severance Tax Permanent Fund, which is designed for rainy day use.
Blogger Joe Monahan reports that Senate Majority Leader Michael Sanchez, a Belen Democrat, is looking at tapping the
$8.4 billion Land Grant Permanent Fund, which also is set aside for rainy days. Sanchez says it is raining.
Voters would have to decide next November whether it is raining hard enough and whether they want to use some of those funds to balance the budget instead of increasing taxes.
If lawmakers decide to raise taxes, “sin taxes” on junk food, cigarettes and alcohol will be popular, although not with the representatives of those industries.
It has been noted that a disproportionate number of poor people smoke so a cigarette tax would put too much of a burden on them. I suppose that is true, but then, they always could quit smoking.
A gasoline tax might be considered because the highway folks are moaning about their losses in revenue. But gas taxes are highly unpopular with anyone who owns a car.
Rolling back the tax cuts of the past seven years also will be proposed. Opponents say they want a sunset clause in the legislation so tax increases don’t continue indefinitely.
Opponents of the tax cuts seven years ago wanted a circuit breaker that would end the cut as soon as a budget deficit occurred. Had they succeeded, we wouldn’t be in the mess we currently are.
There will be another major effort to tax out-of-state corporations that now declare their New Mexico profits in other states that have lower, or no corporate taxes. That effort will run into major corporate lobbying.
Raising income taxes doesn’t appear very high on many lawmakers’ priority lists, even though there were some major cuts in the past seven years. The biggest cuts were on the wealthy but everyone got some help.
Income taxes are unpopular to raise, however, because they hit all at once and because they hit almost all voters. That puts them in the same category as gas taxes and motor vehicle license fees.
We’ll talk about possible cuts in the next column.
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