But as KUNM’s Jim Williams reports, one deleted element of the 2003 tax cuts package that’s received little attention would have automatically rescinded the cuts in bad budget times.

The income tax cuts were phased in over several years and lowered the top rate from 8.2 percent to 4.9 percent.

Several groups have pushed for a repeal of the income tax cuts to help address the state’s $660 million shortfall for the year that ends July 1. By some estimates a repeal could bring in hundreds of millions of dollars.

But opponents of the repeal say it could send the wrong message: that New Mexico isn’t open to business.

But Nash writes that Richardson is standing firm in his opposition, insisting the tax cuts are an economic development tool. The 2003 tax cuts lowered the top state income tax rate from 8.2 percent to 4.9 percent. The state phased in the reductions in over several years.

Richardson has basically held the line for weeks against repealing the 2003 tax cuts as a way to address what is projected to be a $441 million shortfall in the state’s budget for the year that ends June 30.

The governor told me the same thing two weeks ago, although he said he was open to looking at closing some tax credits and tax incentives. That openness didn’t extend to incentives the state offers the film industry, however.

“We need to take a look at them, to look to see if some may have outlived their usefulness,” Richardson told me then.

At the time Richardson didn’t specifically name any tax credits or incentives that he’d be open to closing.

Nash quotes a statement from Christine Trujillo in today’s story in which the AFT-NM president says “Personal income tax cuts for the wealthiest New Mexicans, (those with incomes of $295k or more) capital gains tax cuts, and tax loopholes for big out-of-state corporations are costing the state $1 billion a year in education funding. The governor must leave New Mexico with a better legacy and insist the state rid itself of tax breaks which have outgrown their usefulness. Additional tax revenues must be invested in schoolchildren,”

Richardson has said he does not want to cut public schools spending to make up this year’s budget shortfall, a goal some top lawmakers have questioned.

Nash reminds us that the teachers’ organization isn’t the first, and likely won’t be the last, group to call for the repeal of the 2003 tax cuts.

She writes:

New Mexico Voices for Children is among the groups calling for reversal of the tax cuts.

The group’s research director, Gerry Bradley, said those who make the most can most afford to sacrifice.

“Our lowest paid people are being asked, essentially, to make the largest sacrifice, while those who could most afford to sacrifice aren’t being asked to give up anything,” Bradley said last month.

In addition, Nash writes, several Democratic state lawmakers also have suggested Richardson make such a change.

Who knows if the move to repeal the tax cuts will gain momentum? We’ve still got a month or more before the special session scheduled to address this year’s budget shortfall is called into action. And politics, like much of life, is a balancing of competing interests.

So the answer given today by an elected official may change tomorrow, if there’s a dramatic change in the dynamics at play. But at this point the governor appears firm in his opposition to repealing the tax cuts. He likely derives some fortitude from the fact that some top lawmakers agree with him that repealing the 2003 income tax cuts may not make the most economic sense during the recession.

So the repeal of the income tax cuts appear unlikely this year. But politics is a strange, unpredictable business. Stay tuned.

But the state’s looming budget gap has the state’s chief executive indicating that he’s open to looking at closing some tax credits and tax incentives.

“We need to take a look at them, to look to see if some may have outlived their usefulness,” Richardson said in a brief interview with the Independent.

Richardson didn’t specifically name any tax credits or incentives that he’d be open to closing. But he and legislative leaders have agreed to a special legislative session in October to help close what has been estimated as a more than $400 million budget shortfall for this fiscal year, which ends next June 30.

Overall, the state’s revenues likely will drop by $700 million over two years from previous projections, enough to wipe out the state’s cash reserves.

That kind of fiscal hole has a way of focusing people’s attention, and already there’s a give and take between those who are advocating a strategy of closing the shortfall by trimming costs and those who say the state should focus on the tax side of the equation.

Richardson said Tuesday that while nothing is set in stone he is leery of changing his 2003 income tax cuts or the film tax incentives. He also said he did not want to cut education.

Richardson said he had named his budget chief, Katherine Miller, state Taxation and Revenue Department Secretary Rick Homans and Paul Ritzma from his staff as his negotiating team. Richardson said he’d get involved in the negotiations, too.

“The Legislature will name its group. We’ll start meeting right away,” Richardson said..