Sen. Linda Lopez Guest Blog: Return to Pre-2004 Tax Rates to Fix Budget Shortfall

This is a guest blog by Linda Lopez, a New Mexico State Senator who has represented the Southwest Mesa and the South Valley for 13 years. Senator Lopez is an Albuquerque native and a single mom.

A lot of attention has being given lately to the growing budget shortfall our state is facing – and rightly so. If not addressed, the shortfall can reduce state services which will hurt our economy and our people.

As the estimated figure climbs day by day, media pundits offer advice on what to do about the nearly half a billion dollars in projected shortfall. That advice seems to be centered around cutting badly needed services for our neediest residents. I don’t find those kinds of options acceptable!

Here’s some advice I’ve been giving since 2003: New Mexico should never have given a tax break to its wealthiest residents. It was a mistake and we’re paying for it now more than ever.

Back in 2003, the New Mexico legislature changed the tax code to dramatically lower the tax rate for our state’s highest income earners. The premise for this tax “reform” was to attract executives that would bring businesses with good paying jobs to the state. As far as I can tell, we haven’t seen any benefit to this tax break. What we have seen instead is the loss of nearly half a billion dollars in revenues to the state’s general fund every year.

I find it to be a sad coincidence that budget shortfall estimates are quickly reaching the half billion-dollar mark. This is especially sad because of all the services we will have to sacrifice like child care, long term care services, education, and Medicaid (which brings with it lots of Federal matching funds) to make up for the shortfall.

Last session, Legislative Council Services estimated that the 2009 edition of my bill to return taxes to pre-2004 rates (SB 508) would have created an additional $224,460,000 in revenues for fiscal year ‘10 and $459,320,000 for fiscal year ’11. Imagine if my bill had passed two sessions ago, or three – or better yet, imagine how much better we would be now if New Mexico had never given those tax breaks in the first place!

Next legislative session I plan to once again introduce a bill that will roll back taxes to pre-2004 levels. Please encourage your legislators to support this bill. Services you feel are important hang in the balance.

This is a guest blog by State Senator Linda Lopez. If you'd like to submit a piece for consideration as a guest blog, contact me by clicking on the Email Me link on the upper left-hand corner of the page.