Gov. Susana Martinez -- to the surprise of absolutely nobody -- signed the big, last-second tax bill that will cut corporate taxes in the state and provide incentives for manufacturers.
According to Martinez's press release, House Bill 641l:
* Reduces the tax rate on businesses from 7.6% to a much more competitive level of 5.9%,bringing New Mexico below the national average and making us more competitive with our regional neighbors.
* Allows for a single sales factor option for manufacturers in New Mexico, making our state competitive with the 25 other states that already have the single sales factor. New Mexico was recently ranked first in the nation in export growth, and without a single sales factor, New Mexico would continue punishing exporting manufacturers for adding jobs and growing their facilities in our state.
* Includes a combined reporting provision to address tax fairness issues with large retailers, while
also providing an incentive for these retailers to bring their non-retail operations to New Mexico,
such as distribution centers, warehousing, back-office, and other functions.
* Includes film incentive legislation that preserves the predictability of the budget cap while
providing additional incentives to longer-term TV productions that shoot in New Mexico.
* Fixes the high-wage tax credit and tightens the manufacturing gross receipts tax legislation to ensure they
apply to the intended activities.
* Slowly phases out the hold harmless subsidy for cities and counties over 17+ years, including a
two-year planning period – a very reasonable and prudent approach that differs greatly from the
way it had been previously proposed.
Said the governor;“Republicans and Democrats came together and passed a game-changing jobs package that will level the
playing field with our surrounding states and help New Mexico compete for new business, new
investment, and new jobs.”
So everybody's happy, right?
Well, not exactly.
In a news release, Veronica Garcia, executive director of Voices for Children, said the bill "is bad for New Mexico. Giving tax breaks to corporations with no performance accountability attached to them will not serve the interests of New Mexico’s children and working families. These tax-cuts-for-jobs schemes are known to be ineffective at creating jobs and growing an economy that works for everyone.”
And Gerry Bradley, economist for Voices for Children, added,“What this bill does guarantee is that the state will have tens of millions of dollars less for education, public safety, and health care.
"Another provision in the bill will cost local governments $26 million by fiscal year 2017," Bradley said. "Cities and counties will be either be forced to pass the cost along to working families, or cut services like fire and police protection.”
So, the argument goes on. But the bill is now law.
I wrote a story about some of the bills still awaiting Martinez's signature before tomorrow's deadline. You can scratch this one off that list.