taxes

Gov. Bill Richardson says he “hates” the food tax, but by reimposing the gross receipts tax on food, the state would save around $68 million that it’s been giving local governments to compensate for stripping the tax a few years ago. That’s lot of money. Are Richardson’s hands tied? Most of our panelists vote for a veto.

Sen. John Arthur Smith, D-Deming, said Wednesday that the Senate omnibus tax bill, including a food tax, is so key to fixing the state’s budget that if fails to pass the House cleanly (without amendments), “Then it’s back to the drawing board.” But, he is hopeful the bill will make it through the House intact [...]

Think New Mexico delivered more than 500 letters opposing the food tax to Governor Richardson Tuesday morning.

By most estimates the cost of the 2010 special session is $50,000 a day. It a number that weighs heavy on the minds of law makers as they try to tackle the states budget crunch.  “Everyday of the session costs about $50,000,” Rep. Dennis Roch, R-Tucumcari, said Monday.  ”That’s enough to pay one full time [...]

The state budget deal legislative leaders reach may generate $233 million in new revenue, in part by taking back $70-$100 million it has been sending each year to New Mexico cities to help compensate for the lack of a food tax. In return, cities would get the authority to tax food up to 2 percent. Also in the works: education cuts, a gross receipts tax hike and two versions of a cigarette tax hike.

So far this legislative session, we’ve seen several proposals to reinstate the gross receipts tax on food. The one that seems to have gained traction would apply the GRT to non-staple foods, using the WIC guidelines. That means that while soda and ketchup would be taxable, so would white flour tortillas, pasta and rice. But taxing food could bring in millions to fill a gaping budget hole. Should the state tax food?

The Roundhouse is still deciding what to do with Senate bill 10, a bill that would make a lot of food items taxable in New Mexico. But those grocers who sell the foods say the tax won’t be the only extra cost to consumers.

A measure that would capture state taxes from people not currently paying them cleared the Senate Finance Committee on Saturday.
The legislation, sponsored by House Speaker Ben Lujan, D-Santa Fe, would yield an estimated $15.6 million to help New Mexico close a state budget shortfall for next year estimated at hundreds of millions of dollars.
The tax [...]

They say it’s healthier, easy to implement and most of all, helps the budget. Senate bill 10 makes more foods eligible to be taxed in New Mexico and it crossed its first hurdle on Friday.

At one of the most unique rallies at the Roundhouse during the session, 12,000 white tortillas were handed out by St. Joseph Community Health and other groups opposing a bill that would reimpose the gross receipts tax on certain foods–including a New Mexico staple, tortillas.

When it came from the House, the budget called for $300 million dollars more than the state had. To make the numbers add up the House passed controversial tax measures. But the Senate Finance Committee dropped a surtax on high earners and a temporary increase in the gross receipts tax in favor of reinstating the tax on non-staple foods, cutting education and other measures.

Over three weeks ago Governor Bill Richardson handed a full plate of initiatives to the Roundhouse. So with just about one week left, how much are lawmakers listening?

A petition with thousands of signatures came to the Roundhouse on Wednesday, and the message was: We support raising taxes for education. The argument hits to the core of the debate going on during the legislative session.

The first two tax increases to reach the floor of the House made it through on Friday, but not before some strong words on both sides. One bill would temporarily raise the gross receipts tax by .5 percent; the other would raise taxes on the state’s highest earners by 1.5 percent. Both bills could bring in $300 million to state coffers.

House Speaker Ben Lujan’s bill to implement a temporary half-cent hike in the state’s gross receipts tax would presumably not have passed earlier today if two Republican members hadn’t missed the vote.