Wednesday, September 30, 2009

Roundhouse Roundup: Will the Church Win on Tax-Cut Repeal?

A version of this was published in The Santa Fe New Mexican
October 1, 2009

The Catholic Church — or more specifically, the New Mexico Conference of Catholic Bishops — has a great record recently in getting what it wants out of the state Legislature.

Early this year, the bishops opposed bills establishing domestic partnerships and funding embryonic stem-cell research. The Legislature voted both down. The bishops favored repealing the death penalty. The Legislature, after years of debate, passed a repeal bill and the governor signed it.

And don't forget cockfighting. A couple of years ago, the bishops opposed it. And now it's illegal.

The three bishops are Archbishop Michael J. Sheehan of the Archdiocese of Santa Fe, Bishop Ricardo Ramirez of Las Cruces and Bishop James Wall of Gallup.

But will the bishops enjoy the same success with a proposal that the executive director of the New Mexico Conference of Catholic Bishops says is now their top priority?Archbishop Sheehan

I'm talking about repealing the personal income tax cut that the state granted for top income brackets, which Gov. Bill Richardson pushed through as an economic-development measure during his first year in office.

In a recent letter to newspapers, NMCCB executive director and lobbyist Allen Sanchez explained the bishops' position:

"In 2003 the Legislature cut state income taxes. Since then, revenues are down even more and there will be a special session to cut spending even further. Now is not the time for deeper cuts to education, health care, and services vital to struggling families. The moral response in times such as these is to strengthen our support of families, not weaken it. Lawmakers should seriously consider ways to raise revenue rather than make even deeper cuts to the budget. The Legislature could now repeal the income tax cuts of 2003, enact corporate income tax reform, and close some of the tax loopholes that benefit only a few. If New Mexico could afford to cut taxes by $1 billion in the past few years, surely we can find a way to restore some of those funds now when we so desperately need it."

"We urge lawmakers and the governor not to balance our state budget at the expense of the many New Mexicans working even harder to support their families, but to increase state revenues as a just and necessary tool to meet the very real needs of all of our state's people."

There is some support among Democratic lawmakers for repealing the tax cuts. But I have a feeling this is going to be a pretty tough rooster to fight.

Richardson is not in favor of repealing the tax cut, which lowered the top personal income tax rate from 8.2 percent to 4.9 percent over five years. The governor and other supporters argued at the time it would help attract businesses to the state and create jobs.

It also served as a great national attention-getter for a governor with big national ambitions.

Countless television commentators and national news articles labeled Richardson as a different kind of Democrat, "a tax-cutting Democrat." The governor frequently bragged about cutting taxes while running for re-election as well as during his run for president.

And even though he's not publicly campaigning for any office at the moment, I can't see Richardson signing such a bill — cutting taxes during his first year then repealing the cuts during the last.

And despite the horrible state revenue outlook and the bishops' support for boosting the tax rate, I think a tax-cut repeal is going to have a hard time getting through the Legislature. Though you wouldn't know it from the recent Democratic lieutenant governor forum — in which incumbent Sens. Jerry Ortiz y Pino and Linda Lopez came out strong for repealing the tax cut — the Senate still is a pretty conservative body.

A tax-cut repeal might have a better chance in the House. But Speaker Ben Luján still is very loyal to the governor, so if Richardson doesn't want it, chances are Luján won't be that enthusiastic about it.

But don't count out those bishops quite yet. A lot of people never thought the Legislature would repeal the death penalty.