For some time now, the Rio Grande Foundation has debated whether to change our name to New Mexico for Flowers, Kittens, and Babies. It’s not such a wild notion, given how much funding — and attention — “New Mexico Voices for Children” gets.
The left-wing “nonpartisan, statewide advocacy organization” that “works to create systems-level sustainable change to improve the lives of New Mexico’s children” recently testified before the legislature’s Revenue Stabilization & Tax Policy Committee. The group’s “Roadmap to a Stronger New Mexico” offered, predictably, more of the same: higher taxes and more spending.
Having a cutesy name may garner the adoration of liberal pols and puff coverage by some in the media, but it doesn’t provide a license to bungle facts about important public-policy matters. Here are just a few of the whoppers found in the “roadmap”:
Claim: New Mexico doesn’t “raise enough revenue through the tax code to support education, health, public safety, and infrastructure needs.”
Reality: The Mercatus Center’s annual examination of states’ fiscal condition found that New Mexico notched the worst performance in the nation in terms of “taxes, revenues, and expenses as a percentage of personal income.” That means that the Land of Enchantment is at the greatest “financial risk should [it] experience a sudden downturn” — i.e., it has the least “fiscal slack” to “raise taxes or increase spending.”
Claim: New Mexico has “tried to tax cut our way to prosperity.”
Reality: At the state level, taxes in New Mexico are rather high. According to the Federation of Tax Administrators, the burden here, as a share of personal income, is greater than it is in each of our five neighbors. (State government in California, Massachusetts, Pennsylvania, Ohio, and Connecticut is “cheaper” than it is in the Land of Enchantment.) Yes, former Governor Richardson cut the personal-income tax and Governor Martinez snipped the corporate-income tax. Errors of Enchantment debunked the left’s claims about the former here. As for the levy on corporations, like all taxes, its burden ultimately falls on individuals, be they shareholders or employees. Besides, in the 2017 fiscal year, the corporate tax generated 0.359977 percent of the revenue used to cover to the state’s total spending. How much “damage” did a rate decrease from 7.6 percent to 5.9 percent do?
In addition, “Voices” conveniently overlooks the gross receipts tax hikes that have been broadly implemented by local governments since the turn of the century. The GRT burden has risen by 30 percent in Las Cruces. It’s up 31 percent in Santa Fe. Albuquerque’s GRT rose by 35 percent. Apparently, in the “Voices” world, these tax hikes don’t matter.
Claim: New Mexico has “[m]assive infrastructure needs.”
Reality: No, it doesn’t. A favorite claim of many Santa Fe lobbyists — and pols from both parties — the Rio Grande Foundation regularly debunks this one. Our bridges and highways are not “crumbling.” Killing the prevailing-wage mandate would make infrastructure spending go a lot further. Asinine projects, such as “Spaceport America” and the New Mexico Rail Runner Express, squander revenue that could be devoted to important water, transportation, and public-safety projects. And there are abundant reasons to avoid higher taxes on gasoline and diesel.
“Roadmap to a Stronger New Mexico” reads like the playbook for a future Governor Michelle Lujan-Grisham administration, so the Foundation will continue to examine it, and expose the scheme’s faulty assumptions, dodgy data, and irresponsible recommendations. Watch this space!