Lawmakers prepare for tax hike battle

Posted at: 11/03/2009 5:24 PM | Updated at: 11/04/2009 7:25 AM
By: Stuart Dyson, Eywitness News 4; Matthew Kappus, KOB.com

Lawmakers are divided on a tax increase

For some lawmakers, the governor's forecast for a tax hike is the solution to the state budget deficit. But for others, a tax hike is seen as the death of the economy.

Gov. Bill Richardson admitted for the first time Monday he thinks taxes need to go up in 2010.

"It's inevitable. It's very painful," he said.

In the October special session, the governor and legislative leaders kept tax hikes off the table as they tried to balance the state's $650 million deficit.

For many Democrats in the legislature, rolling back some or all of the governor's income tax cuts is a popular idea. But it is not the only idea out there.

"We're going to have to find some way to fill that gap temporarily until our economy gets back on its feet," said Rep. Jose Campos (D-Santa Fe). "Then hopefully we're looking at some kind of trigger system to repeal that once we're back up on our feet."

Rep. Brain Egolf (D-Santa Fe) is looking at other taxes.

"A cigarette tax, a dime a drink for alcohol, change the way we register vehicles. Right now we register cars based on their weight. We should be registering them like most other states--based on what they cost," he said.

But fiscally-conservative Democrats appear to be lining up with most Republicans who say higher taxes are toxic.

"My vote will be not to increase taxes," said Rep. Jane Powdrell-Culbert (R-Corrales).

She says in an economic environment where people are being laid off and wages are stagnant, she doesn't want to increase the tax burden.

The governor says in a few days, he will appoint a special tax study group to look at as many as 20 proposals for tax increases.

Meanwhile, tax opponents point out that state spending has grown by 50 percent since Richardson took office in 2003 while the state's population has grown by a tiny bit.

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