Gov. signs bill cutting state's corporate income tax
Posted at: 04/04/2013 5:29 PM
| Updated at: 04/04/2013 5:41 PM
By: Stuart Dyson, KOB Eyewitness News 4
New Mexico’s old corporate income tax – the highest in the region except for California’s – is taking a big drop, thanks to a huge tax reform bill Gov.Susana Martinez signed into law Thursday. But not everybody is happy about it.
Protesters turned up at the signing ceremony at the University of New Mexico’s Zimmerman Library, complaining that the corporate tax cut is too much, especially after the governor’s veto last week of a raise in the state’s minimum wage.
“Governor Martinez’s priorities are screwed up,” said Lucia Fraire, who described herself as a minimum wage worker. “Shame on you, Susana, for not standing up for working New Mexicans, and shame on you for giving tax breaks to already rich CEOs and out of state corporations.”
Martinez has called the minimum wage hike a job killer, and she calls the corporate tax cut a job creator.
“Republicans and Democrats came together and passed a game-changing jobs package, leveling the playing field with our surrounding states and helping New Mexico compete for new businesses, new investments and new jobs," she said.
Lawmakers from both parties and business leaders joined the governor for the signing ceremony. The legislation lowers the corporate income tax rate from 7.6 percent to 5.9 percent, phasing it in over a five year period.
“This brings us below the national average,” Martinez said. "It makes us more competitive with our regional neighbors.”
“I think it’s a step in the right direction,” said architect Dale Dekker, of the Dekker/Perich/Sabatini firm in Albuquerque. “Our state suffered tremendously through this last recession. We’ve lost over 20,000 construction jobs statewide. This gives us a boost. This gives us a chance to be competitive.”
Opponents of the legislation compared it to Gov. Bill Richardson’s personal income tax cuts of ten years ago, which included big cuts for the state’s wealthiest people.
“But we didn’t see increases in employment because of the 2003 tax cuts,” said economist Gerry Bradley of New Mexico Voices for Children. “We don’t expect to see employment increases from these tax cuts either. It’s not going to happen.”
“I’m willing to bet that by the end of the first two years of this new tax reduction, the number of companies that actually expanded and have been attracted by these tax cuts will be miniscule,” said Sen. Jerry Ortiz y Pino, an Albuquerque Democrat, who voted against the tax package. “In no way will they pay back the money that’s lost.”
The tax package will phase out more than $140 million in state revenue that currently goes to local governments. Those governments will have the authority to raise local taxes to maske up the difference.
The package also includes the so-called Breaking Bad bill that will increase the payback incentives for television shows and some movies shot in New Mexico.