Democratic group suggests raising taxes by $300M in New Mexico to fix budget

Dem group advocates NM tax increase on wealthy

SANTA FE, N.M. — A group of New Mexico House and Senate Democrats advocates raising taxes by more than $300 million to balance the state’s budget and avoid deep cuts in health care services and education.

One proposal outlined Thursday will roll back personal income tax cuts and capital gains reductions that were enacted in 2003.

Democratic Gov. Bill Richardson opposes that, contending that the tax cuts are an economic development tool for recruiting businesses with high-paying jobs.

The group of mostly liberal Democrats, calling itself the “Working Families Caucus,” mapped out their budget-balancing proposals during a news conference and said they’re hopeful they can overcome opposition to tax increases from conservatives, particularly in the Senate.

“We’re up to the battle in the caucus,” said Rep. Mimi Stewart, D-Albuquerque.

She said not quite two dozen lawmakers were part of what she described as a “loose knit” group.

Among its proposals:

— Higher income taxes on upper-income New Mexicans. A measure by Rep. Miguel P. Garcia, D-Albuquerque, would establish higher rates for those earning $200,000 or more. Another proposal would impose a 1 percent surtax on those earning more than $150,000.

— Raise income taxes on multistate corporations by requiring a different tax reporting method for them. Similar proposals have failed in the Legislature during the past five years.

— Impose a sales tax on purchases made over the Internet from businesses that don’t have a store in New Mexico.

— Increase the tax on cigarettes by $1 a package.

— Tax soft drinks.

Stewart and others said they opposed cutting public schools and other government services, such as health care for the needy that’s provided through Medicaid.

“Everybody wants public safety, good schools, all the services, but no one wants to raise taxes. It’s time that we share the sacrifice and that everybody do their share to protect … the poorest of the poor,” said Rep. Antonio Lujan, D-Las Cruces.

To help balance the budget, the group said it supported cost-cutting measures recommended by a Richardson task force. Those proposals include consolidating several state agencies.

Richardson has recommended $200 million in tax increases to help balance next year’s budget and on Thursday he expressed reservations about several tax measures sponsored by legislators, including the 1 percent income tax surcharge and the sales tax for online purchases of goods. However, the governor stopped short of flatly opposing the proposals.

Richardson said at a news conference that he remained open to taxing soft drinks and candy, which could generate $18 million, although he opposes reinstating the gross receipts tax on food staples.

The governor hasn’t endorsed a specific tax proposal and acknowledged that it will be difficult to win approval of any tax increase in the Senate.

“I know there’s potential disagreements in the Senate on the revenue issue. I respect that,” said Richardson.