By Jerry Ortiz y Pino
—Sixty days of legislative effort ended on Saturday with a last-minute madcap flurry in both chambers. It produced a result that Gov. Susana Martinez proclaimed a “victory for New Mexico” and Rep. Mimi Stewart described as “a royal screw job.” Whose version comes closest to the truth?
The governor got only one bill through that final morning’s meat grinder—the omnibus tax measure she pointed to as emblematic of her victory.
Note the maturation of Gov. Martinez. In this, her third year of dealing with the Legislature, she has learned the all important trick of defining for the citizenry and the media who has emerged victorious. In past years she would dwell on the lengthy list of items from her agenda that had not gotten through. But this made her administration look like a failure for not winning more issues.
This year, a savvier, wiser governor has chosen to call passing a single bill from her agenda a great victory. Forget the rebuffs her educational reform efforts received. Ignore the kick in the teeth her drivers’ license repeal got. Don’t waste any time mentioning the cold shoulder her “tough on crime” measures suffered. Focus only, and lingeringly, on the big cut in taxes.
We must pore through that particular package of tax cuts and loophole closings if we are to accurately answer the victory-or-screw-job question. If its contents are good, if they produce economic success for the state in the future, we will all celebrate with her. But if instead the next few years reveal the box was filled with empty promises and wasted opportunities, then it will be Stewart’s verdict that history will remember.
It is curious that the tax package would emerge as the fulcrum for the last 60 days. It hit the Senate Floor on Saturday morning, a scant one hour before the final bell was set to ring. It passed after 10 minutes of desultory debate, essentially unread by the members of the Senate, on a 35-7 vote. The senators relied unquestioningly on the Finance Committee and its chairman, John Arthur Smith, the architect who had fitted together this strange amalgamation of tax cuts and tax increases on the previous night. He presented it with the warning that it was revenue-neutral but any attempt at amending it on the Senate Floor would destroy this compromise and could land lawmakers smack dab in the middle of a special session.
The seven negative votes were from the seven most liberal senators in the body, myself among them. We recognized the compromise was no such thing. It balances the major reduction in corporate taxes and resulting loss of state revenue by pulling back money from local governments over the next few years. That is money the state gives to local governments to ease the effects of eliminating a food tax engineered during the Richardson era.
When the loss of this state money hits the cities and counties, they will have two choices: slash their own budgets (and the services they provide) or increase the gross receipts tax (the most regressive of all taxes). That second option the omnibus tax bill thoughtfully makes possible by increasing the allowable rate cities and counties may charge.
So, to cut to the chase, this grand compromise means that reducing businesses’ tax burden will be accomplished by increasing the burden on everyone else, especially the working class and the poor. An increase in gross receipts taxes levied by local government will erode whatever temporary gains a minimum wage hike offers.
Now we see why Rep. Stewart immediately pinned the “royal screw job” tag on this Martinez “victory.” She is absolutely correct. And while some are crediting Martinez with having paved the path to her re-election next year with this great legislative accomplishment, we shouldn’t forget that it is the many working-class and poor New Mexicans who will cast the majority of the votes in that election.
It will be up to the Democratic candidate in 2014 to remind those voters of the way Martinez has squeezed them so tightly in order to provide another benefit for her friends in the business community. It is telling that the governor who vowed never to increase taxes has chosen to do precisely that for those New Mexicans least able to afford it. Her tax increase on them may be indirect—levied by local government—but it is every bit as painful as any other.
Jerry Ortiz y Pino is serving as state senator for District 12 in the New Mexico Legislature—essentially Downtown Albuquerque, the historic neighborhoods that surround it, the UNM campus area and a portion of the South Valley. A retired social worker, he spent his entire 42-year professional career in New Mexico, working in private and public agencies in seven different cities in the state.