Proposed tax increases die in committee

Posted at: 10/18/2009 4:43 PM | Updated at: 10/18/2009 9:44 PM
By: Gadi Schwartz, Eywitness News 4; Matthew Kappus, KOB.com

New Mexico lawmakers grappled with the question of raising taxes to close the state's $660 million shortfall Sunday.

Lawmakers shot down several proposals in committee before they could reach the Senate floor.

A majority of committee members said the bills are precluded because Gov. Bill Richardson specified no tax hikes in his official proclamation for the session.

Lawmakers who want tax hikes say the governor improperly narrowed the Legislature's options for filling a $650 million gap in this year's state budget. They questioned whether his proclamation was constitutional.

Those in favor of tax hikes say the hole in the budget should not be filled solely by cuts to schools and state programs, but by increasing revenue.

Richardson specifically said tax enhancements will not be considered this late in the game because they can't raise money fast enough to cover this year's shortfall. Senate leaders eventually agreed, voting down bills that would tax alcohol, soda, cigarettes, income and large corporations.

Sen. Gerald Ortiz y Pino (D-Albuquerque) said Richardson's proposal doesn't give the senate too many options.

"The governor gives us one solution that involves cutting schools, cutting all state agencies that he could have done from day one, but he didn't," he said.

Sen. Tim Jennings (D-Roswell), didn't find too much to like about the current legislation.

"Reluctantly, I'm going to probably have to oppose your deal and a lot of these measures because we are in a box and we need to find a way out. But our hands have been tied by the proclamation," he said.

Meanwhile in the House, several other tax bills were introduced by lawmakers also hoping to bring in new money. If those pass through, they will face a very tough time in the Senate.

As for spending cuts, members of both the House and Senate seem encouraged by the governor's recent concessions. Richardson is now proposing a 1.5 percent cut to education and 3.5 percent cuts to state agencies across the board as well as a big reduction in the state reserves.

(The Associated Press contributed to this report.)

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