Reports and rankings are useful things, especially when they measure relevant data and show clear paths to improvement or continued success. Two 50-state rankings came out this week. Here is some information and analysis:
Tax Foundation’s 2013 Business Tax Index: The question asked is how business friendly are the various states in terms of the taxes levied on businesses? The answer, according to the Tax Foundation, is that New Mexico is 38th in the nation. Our property tax burden is the best in the country, but our sales/gross receipts tax burden is 45th, our corporate income tax rate is 39th, and our personal income tax is 34th. There are two takeaways: 1) New Mexico has relatively heavy overall tax burdens on business 2) Without cutting or increasing the overall tax burden, New Mexico’s policymakers might consider ways to reduce growth-killing taxes (like that on corporate income) with small property tax hikes. You can see the mapped rankings below. Note that New Mexico underperforms all of its neighbors.
The second relevant study is the Cato Institute’s 2012 Fiscal Policy Report Card on America’s Governors: According to the report, Gov. Martinez is graded “C” (although she is the top-graded “C” in the report).
According to the report:
Her spending score in this report is a little below average, and was likely dragged down by New Mexico’s liberal legislature. For example, her proposed spending increases have been lower than the final enacted increases. However, Martinez scores well on tax policy. She promised to oppose tax increases, and she has stuck to that pledge. In 2011, for example, she vetoed a tax increase to fund unemployment compensation saying, “I support reducing unemployment benefits to protect the solvency of the fund, but I do not support increasing job-killing taxes on small businesses while we are struggling to recover from a recession.”She also vetoed a bill to expand the corporate tax base. She has pursued business tax cuts to make New Mexico more competitive. She signed a bill to reduce the “pyramiding” or layering of gross receipts taxes on inputs to construction. And she has called for exempting about 40,000 small businesses from the state’s gross receipts tax. Another good move by the governor was approving a reduction in film tax credits, which are wasteful corporate welfare.