Mario Burgos

Clear thinking and straight talk from the top of a mountain.

Thursday, March 18, 2010

Tax Food Then Light

The unemployment situation in New Mexico continues to grow bleaker in New Mexico with the latest job cut announcement:
About 700 employees are expected to be out of work starting in two weeks. That means more people out of work in a town that's already suffering from a high unemployment rate. The city's unemployment rate is sitting at 8.9 percent as of January of this year.
Yet, in the spirit of the Sheriff of Nottingham, the Democrats in the legislature pushed a food tax increase on the unemployed and our Democratic Governor is poised to sign it. As if that wasn't bad enough, now they are going to make it even harder for struggling families to keep the lights on, and for those poor souls with electric stoves, cooking their newly taxed meals will also come at a premium:
In general, the state would set greenhouse gas emission caps based on its reduction goals. Companies would be allowed to exceed state-set emissions caps by buying "allowances" from others that reduce their emissions more than required.

Critics argue that a cap-and-trade program will drive up the cost of electricity and other fossil fuel energy sources, and say they make no sense at the state level.

The Environment Department announcement this week was accompanied by a lengthy and highly technical "white paper" on the program and solicitation for public comment regarding the basis for the cap, distribution allowances and rate of cap reduction.

It did not address potential costs or economic impact. 
 Well, let me help fill the void and address the potential cost and economic impact.  It will cost those already struggling to get by even more money.  See, when you raise the cost of energy source providers, they pass those costs onto consumers of energy. What makes this particular "hidden tax" increase so abhorrent is that it is an end run around the legislature. 

We already know that the Democrats holding the legislature hostage have no problem raising taxes on struggling working families and the unemployed, but even they had the sense to avoid passing the nonsensical statewide cap and trade tax that has been introduced in the last few sessions. Yet, the Governor and his minions are once again showing a lack of respect for our legislative process and adopting a dictatorial decree (AKA regulatory law making) approach to increasing taxes.

The thing is... the people have had just about enough of this.

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Thursday, March 11, 2010

It's A Good Question

I mentioned in a previous blog post that I heard Lt. Governor Diane Denish on the campaign trail saying, "Now is not the time to raise taxes."  All too often politicians say one thing on the campaign trail and do an entirely different thing when they are elected to the office for which they are campaigning.

Looks like we don't even have to wait to elect the Lt. Governor to see her live up to that long tradition of saying one thing and doing another.  Consider this from a recent press release by GOP candidate for Governor Susana Martinez:

Denish initially claimed to oppose an "across-the-board tax on all food." That sounded to me like a cleverly-worded statement that left the door open to a "partial" tax increase on "certain" foods (like maybe tortillas, for example, as was proposed during the regular session). So in January,  [] I called on her to clarify.

Her response? Silence.

Sure enough, as the "partial" reinstatement of the food tax was flying though the legislature and she was presiding over the state Senate, she did nothing.

And just last week, Denish was acting Governor... As acting Governor, she even signed legislation.

So, that raises this question: If Denish is so opposed to the food tax, and she was acting Governor, why didn't she take the opportunity to show real leadership and VETO the food tax increase?
It's a good question.

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Wednesday, September 30, 2009

Taxpayers Paying to Advocate More Taxes

I've noted in the past that the problem with state created "Authority" entities is that they are nothing more than a license to tax without accountability:

Here comes the bad part. When elected government officials raise taxes, we at least have an opportunity to vote them out of office the next election cycle. The same is not true for government created Authorities. These folks are appointed, not elected, so the taxpayer has no recourse whatsoever.

It basically boils down to "Taxation without Representation." The last time that got out of control there was a revolution in this country.

The Rio Grande Foundation points out one more reason to fight against the creation of Authority entities:

Now, enclosed in your most recent water bill from the government-controlled Albuquerque Bernalillo County Water Authority, “customers” of the authority are receiving the following notices alerting them to the 1/4 cent transportation tax on the ballot with language that clearly endorses the tax. Check out both sides of the insert below:

Nothing like making taxpayers pay to promote additional taxes on taxpayers. Angry and want to take it out on someone? Well, you can't take it out on the folks running the Albuquerque Bernalillo County Water Authority because the state conveniently set it up so that these people are appointed and not elected to this fee increasing non-accountable entity.

But, don't bottle up that anger. Redirect it toward something useful. Vote one of the biggest proponents of this tax increase out of office - Mayor Marty Chavez. You know, the guy who has been trying for years to force this tax increase on the public in order to build his trolley on Central.

In fact, Mayor Marty Chavez is on the Governing Board of the organization, which means he approved this misuse of funds. Make no mistake, a water authority spending your money to push a transportation tax to build a trolley is a misuse funds. Just another example of politics as usual from Mayor Marty.

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Friday, September 18, 2009

Doomed to Repeat History

Let's see if I've got this straight. Ten years ago a transportation tax increase was pushed by former Mayor Jim Baca. The idea was to raise money to improve the city's transportation infrastructure. It was a hard sell at the time, but one of the "selling points" was that it was a "temporary" tax increase with a ten year sunset provision.

At the time of the increase, an editorial took issue with the fact that a temporary tax would be pushed to fund what is usually considered one of the few justifiable roles of local government:

Keeping the city's streets and intersections in good repair isn't a special project for a special tax; it is one of the most basic of city services. If City Hall had been doing its job (for many years before Mayor Baca came into office), street maintenance would already be getting done from the existing revenue sources Bregman and Brasher propose to harness.

About six years after the tax increase was passed, an audit found that the money was being mismanaged by Mayor Martin Chavez's administration:

After nearly six years, a quarter-cent tax for transportation has not caused an increase in the passenger service provided by the city bus system, a new audit says.

The tax has provided $28 million for the Transit Department, and $21 million should have been used for enhancing bus service under a policy approved by the City Council, the audit says.

However, the Transit Department "is not currently complying with this expenditure requirement, because the amount of passenger service being provided is currently at approximately the same level as existed prior to Transit receiving these quarter-cent tax funds," says the report from the city Office of Internal Audit and Investigations.

Then, in 2006, Mayor Marty Chavez and some City Councilors try to sneak a tax extension in while folks were focused on the Election Day at hand:

November 6th, 2006... the day before the election where Democrats took over both the House and Senate, the Albuquerque City Council passed an extension to the Transportation Infrastructure Tax. The Council and the Almighty Alcalde used the cover of the election to rail road the public and shove a tax hike through for the primary purpose of building Marty's little train.

The move outraged the public and a huge political brouhaha ensued. Months later bowing to public pressure, the council pulled the extension and created a marketing, uh... "task force" to sell, uh... "study" the trolley. All of that took place almost exactly two years ago.

Well, very few people were buying what Mayor Marty was selling, namely the need to build a very expensive trolley system down Central. Oh sure, the Mayor tried everything he could think of to convince folks it was a good idea. He even paid consultants to sell the idea:

Now, there are a couple of points that really ought to jump out at you. First and most obvious is that the only way this can be funded is by extending a tax on everyone that was supposed to expire.

The next eyebrow raising fact requires a little basic math. Keep in mind that the Albuquerque Metro Area population is up to around 800,000, and is expected to reach a million before long. Yet, this Streetcar is only going to be used by about 5,000 people. Put another way... 99.5% of the people are expected to pay hundreds of millions of dollars (these things never come in on budget - think train), so 0.5% of the population can ride a streetcar instead of taking the bus.

Mind you, whether you call it a streetcar or a trolley, or a light rail system, the reality is that we already have an economical way for the public to travel, and it's called the bus. If the Mayor and City Council really wanted to improve public transportation they would just increase bus routes. It's cheaper and heck of lot more flexible to deal with changing population centers in a growing city.

Oh, I know. No one wants to ride a bus right? Wrong!

Even with gas prices plummeting from a July high of $4 per gallon to the current price of $1.84 per gallon — the lowest gas prices have been since 2004 — bus ridership in the Duke City is still up from this time last year.

So, where does this bring us? Well, the Mayor and the City Council want us to turn what was originally promised as a temporary 10 year tax increase into a permanent tax increase:

Albuquerque city councilors are scrambling to reassure voters that a proposed $37 million-a-year transportation tax won't last forever.
Council President Isaac Benton and Councilor Ken Sanchez held a news conference Thursday and said they plan to introduce a resolution at Monday's council meeting clarifying that the quarter-cent gross receipts tax, which will be on the Oct. 6 ballot, will expire after 10 years.

The tax was first approved in a special election in 1999 and is up for renewal this year because of a 10-year sunset clause in the original ballot question.

But the ballot question councilors approved for the extension this year does not include an expiration date, meaning the tax could continue indefinitely.

We're supposed to forget that the Mayor has been pushing this tax increase for three years to build a trolley and believe it is for trails and roads. We're also supposed to forget that they once promised to make it temporary. What is it they say about history repeating itself?

Those who cannot learn from history are doomed to repeat it
Now, you may be tempted to argue that this isn't really an accurate example of history repeating itself. After all, the first time, voters were asked to approve a tax increase that had a sunset provision. This time the voters are being asked to extend the same tax increase without a sunset provision, and believe it will only last ten years. Even more ridiculous is that we're supposed to believe the sunset provision was left out "accidentally" by our elected officials.

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Thursday, September 17, 2009

Election Cycle 2010 is in Full Swing

When it comes to political campaigning, it is often said that no one is really paying attention until after Labor Day. Of course, what they are talking about is the Labor Day preceding that year's November election (i.e. Labor Day 2009 and Election Day 2009).

However, we now have undeniable evidence that our election cycles have been greatly expanded. This year's election day marked the official start not of Election Cycle 2009, but of Election Cycle 2010. Last night was the first debate of the Democratic Lt. Governor candidates of 2010. I know I keep repeating the year, but I just can't get over it. Seriously, it's not like these folks are running for President of the United States. They're running for a position that really doesn't do much other than collect a salary and break the occasional tie vote:

This money fits in well with the theme in a cable television ad from the state GOP last week lambasting [Lt. Governor Diane] Denish for casting tie-breaking votes on a bill to expand the hours of operations for nontribal casinos in the state while taking tens of thousands of dollars from gambling interests. The ads refer to statements Denish made prior to being elected that gambling was bad for the economy. The ad calls Denish's votes "a pay-to-play jackpot."

What's even more bizarre than a Lt. Governor race getting media attention fourteen months before the election? The fact that the six candidates think that campaigning for raising taxes in tough economic times is a solid campaign strategy:

Several Democratic candidates for lieutenant governor who attended a forum Wednesday at the NEA building on Botulph Road said they'd like to repeal state personal income tax cuts for upper-income bracket taxpayers — a plan pushed at the outset of Democratic Gov. Bill Richardson's administration.

That's right, the state has gone an unrivaled spending spree over the last seven years, and rather than cut waste, these folks want to take more out of our pockets. Of course, some of the folks running for the relatively high-paying low stress job, are the same legislators that approved these massive budget-breaking spending sprees, so I guess its CYA time.

Now, in case you're thinking this expanded election season is limited to the Lt. Governor race, think again. It looks like the Secretary of State office is also kicking it into gear for Election Cycle 2010:

Attention candidates and potential candidates of any party: The Secretary of State’s Office is hosting “candidacy seminars” at the Roundhouse next week in an effort to teach budding politicians the basics of filing for public office and convey some general understanding of election laws and regulations.

The free three-hour workshops — scheduled for 9 a.m. or 1:30 p.m. Wednesday — will cover such topics as opening a campaign account, campaign finance reporting laws, withdrawal dates, hardship exceptions for online reporting, financial disclosure requirements, in-kind contributions, etc.

Wow, I wonder just how many people are going to show up for this? Now, don't get me wrong, people running for state offices have always started toying with the idea this early. It's not uncommon for them to put out feelers to check for support levels. But, this is way beyond that. This is full official campaign mode at a very early time. I guess on the upside if the Secretary of State asks budding candidates to sign in, a simple records requests will make it clear, which seats are in play for 2010.

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Tuesday, April 07, 2009

Why is This so Hard to Understand?

I was vehemently opposed to regional cap and trade legislation introduced this past session because it would put New Mexico at an economic disadvantage and drive one of the cornerstones of our economy, the oil and gas industry, to other states while accomplishing nothing to deal with the global warming obsession that has been so heartily embraced by the left.

Quite honestly, rushing through national cap and trade legislation during a time of economic crisis would be equally foolish. Heck, for that matter, rushing through any far-reaching legislation on the federal level during any kind of crisis sets a bad precedent. So, my hat is off to Senator Jeff Bingaman:
Bingaman, who has worked for years to pass climate change legislation, joined Republicans for last week's vote because he did not want to short-circuit the deliberation needed to come up with a workable bill, spokeswoman Jude McCartin said.

The rules being considered would have allowed climate change legislation to be folded into the Senate's consideration of the federal budget, which allows limited debate and requires 51 votes for passage.
There are those who believe the world is warming on and on the road to an impending doom (I'm not one of them), but at least cooler heads have prevailed in the Senate.

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Tuesday, March 10, 2009

The Only Thing Worse

The only thing worse than raising taxes on income during times of a severe recession - bordering on depression - would be raising taxes on taxes. That's right, you read that correctly. There is actually a bill being pushed through this legislative session that proposes raising taxes on taxes:
SB523: Federal Income Deductions as State Income (Tax on Tax) sponsored by Sen. Otiz y Pino. This bill will require individual income taxpayers who itemize deductions on their federal return to add back any state and local taxes included in their itemized deductions in determining taxable income for the state income tax. Basically requiring taxpayers to pay a tax on tax.
Good to see the nice folks up in Santa Fe looking out for us.

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Friday, March 06, 2009

Polling Half the Tax Increase

Wow, I'm amazed. Unemployment in New Mexico continues to rise and and the nation's unemployment numbers for February are the worse we've seen in 25 years:
The U.S. economy continued to hemorrhage jobs in February, bringing total job losses over the last six months to more than 3.3 million, and taking the unemployment rate to its highest level in 25 years.

The government reported Friday that employers slashed 651,000 jobs in February, down from a revised loss of 655,000 jobs in January. December's loss was also revised higher to a loss of 681,000 jobs, a 59-year high for losses in one month.

Yet, the Albuquerque Journal has an article on a poll with the headline, Poll Shows Support for School Tax. For the life of me, I can't imagine who in their right mind would want two tax increase under these circumstances:
Proponents of a proposed new public school funding formula hope that results from a new poll will breathe life back into legislation stalled in a House committee.

The poll, conducted this week, found that 59 percent of registered voters surveyed statewide support a gross-receipts tax increase to pay for the new formula. The formula would add about $360 million to school budgets.
Amazing, a majority of registered voters surveyed support two tax increases. Wait a minute. Let me look at that again. Hmm, something's not right. Oh, I see.
Voters weren't asked about a proposed increase in personal income taxes, which is another component of the house bill.
Nice. A poll that only asks about one part of the proposed tax increases. Isn't that convenient. Funny how they didn't think to poll whether folks would support increasing personal income taxes on everyone in the state of New Mexico earning under $8 an hour.

What's even more interesting is the actual breakdown of those strongly supporting this half truth:
Of those polled, 23 percent strongly oppose the measure while 13 percent somewhat oppose it. Strongly supporting it were 36 percent, and somewhat supporting it were 23 percent.
Now that's interesting... only 36% strongly support it. I wonder how many of those somewhat supporting would drop if you asked them how they felt about the tax increase if they knew it was only part of the equation? I wonder how many of those somewhat supporting the gross receipts tax increase would still support it if you helped them do the math, and pointed out that the tax increase proposed would increase the percentage they pay in taxes by more than 10%.

If I were legislator considering this bill, I wouldn't let this polling change my mind. When it come time for re-election, you can be sure that the facts around this tax release will be presented in a lot more factual light. The 36% that strongly support it may still vote for you, but last I checked, that wasn't even close to a majority.

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Tuesday, March 03, 2009

Education Budget Doubled Over 12 Years

An interesting thing happened yesterday up at the legislature. HB346: Gross Receipts Surtax Bill received a do pass:
As a reminder, this bill proposes the gross receipt tax rate (GRT) be increased by .5%. In addition the bill also proposes an increase in the personal income tax rate (PIT). The PIT would increase in tax year 2010 from 4.9 percent to 6 percent for married persons filing jointly with taxable income of at least $24,000 and for single persons with taxable income of at least $16,000. The additional revenue would be earmarked for public education.
That's right this one bill raises not one, but two taxes - a double whammy. And, before you folks jump in and say it's about time rich people invest in education, please review just who is getting hit with higher taxes right now.

The PIT is being raised on folks making $16,000 per year or more. That comes out to an hourly rate of less than $7.75. Of course, these same people are going to be hit with higher gross receipts taxes if this bill goes through. Talk about hitting people when they're down.

But hey, it's for the children, right? Yeah, think again. Let's look at education spending over the last dozen years (subscription):
Among those speaking against the measures was Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce.

Cole said the proposed funding formula doesn't contain enough accountability. She said the amount the state spends on public education has doubled over the past 12 years to $2.4 billion, yet the dropout rate remains high. She noted that the number of students has, for the most part, remained flat during that time.
Actually, Ms. Cole is being kind by only focusing on the dropout rate. Not only has dropout rate remained high during this period of huge infusions of capital, the actual performance of students overall has gotten worse:
More evidence was provided recently b the findings of the American Legislative Exchange Council, the limited government-oriented national legislative umbrella organization based in Washington, DC.

That organization's recent study, the 15th edition of their "Report Card on American Education," shows that New Mexico's K-12 government-run education system is not only behind other states, but is falling further behind as time passes. According to the New Mexico-specific pages of the study which can be found here, The Land of Enchantment has fallen from 43rd to 48th since 1998 in ALEC's overall ranking. This, despite a more rapid increase in per-pupil spending than was found in other states (42% to 36.6%).
Of course, I left the best part for last. The rationale for introducing these increased regressive taxes on the poorest amongst us is to fund a new public school funding formula to help make up for a supposed underfunding for schools. The thing is that the new funding formula bill got tabled. This has spurred speculation that the new INCREASE YOUR TAXES BILL will be amended to remove the language to use the revenue for education and instead be used as a revenue generator the budget.

Yeah, that's just what we need during a time of economic crisis - more taxes.

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Saturday, November 01, 2008

Middle Class Income Cap Continues to Drop

I love it when I'm right. If you watch me on KOB-TV's Eye on New Mexico tomorrow morning at 10:00 a.m., one of the topics you'll here me discuss is the rapidly declining middle class income cap. In order to stir the fires of class warfare, Senator Barack Obama first indicated that he would only be increasing taxes on those making over $250,000 per year in order to "redistribute wealth."

In his 30 minute Barackomercial, he dropped that number down to $200,000. His running mate, Senator Joe Biden, has moved that cap even lower to $150,000, and now campaign surrogate, Governor Bill Richardson, has it pegged at $120,000 per year.

Think about this for a minute. We're still in the campaign phase, and on a daily basis the Obama campaign is increasing the number of people who will see their life savings redistributed.

Mark my words, if Obama is elected, it won't be long before that number is lowered to $100,000. To put that in perspective, consider that if you have a household with two experience teachers or police officers or firefighters, they will probably be earning over a $100,000 a year. Obama and his friends want to see their "wealth" redistributed.

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Tuesday, October 21, 2008

Attorney General Seeks to Raise Taxes

Apparently, someone forgot to tell Attorney General Gary King that his job is to prosecute bad guys - not raise taxes. I guess oil and gas revenue must be really looking bad since the Attorney General has decided his initiatives for the upcoming legislative session are to raise taxes (subscription):
Impose a higher state tax on "alcopops," which are typically fruit flavored and sweetened malt beverages. [Attorney General Gary] King proposes to tax the drinks at a rate for distilled spirits rather that the current practice of taxing them at the lower rate for beer. California regulators have already taken such steps. The drinks include brands such as Mike's Hard Lemonade. King estimates that the higher tax rate could generate $2 million a year for programs to prevent underage drinking.
It has been widely acknowledged that alcohol is a recession proof industry. So, it is probably not surprising that Democratic Attorney General Gary King is seeking to increase state revenue for government run programs by taxing the industry. The problem is: It's not the industry that he is taxing. It is you and me.

In case you're planning on voting Democrat in the upcoming election, this is a good indication of what is to come if the Democrats win in November - tax, tax and more tax.

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Wednesday, October 15, 2008

Gotta Love the Timing

The economy is in a deep recession. People are in danger of losing their homes. The financial industry is being taken over by the government, and in New Mexico, we're going to face ballot initiatives that will raise taxes on our homes:
Voters across the state will decide the fate of $223 million in proposed general obligation bonds to help pay for major projects at colleges and universities, health facilities, senior centers and to buy books for libraries.

Four bonds will be on the Nov. 4 ballot, and each will require majority support to pass.

Higher education institutions have the most at stake, with roughly $140 million on the line.

"This will allow important new projects to go forward, training our students for important fields such as health care, film and education," Higher Education Secretary Reed Dasenbrock said. "In addition, this invests money in crucially needed infrastructure projects, which will save energy costs for our institutions. Virtually every institution in the state benefits from this GO bond, and local economies will strongly benefit from these new construction projects."

The bonds would be paid through statewide property taxes. If all the measures pass, the owner of a $100,000 house would pay an extra $18.06 during the 2009 property tax year, according to an analysis by the state. The annual cost would decrease slightly each year thereafter.

In Albuquerque, where the median price of a home is $195,000, taxes would increase by about $35 in 2009 if all four bonds are approved.
Is this really a good time to take on more debt?

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Monday, April 21, 2008

Bill Richardson's Legacy Begins

We are already beginning to feel the effects of Governor Bill Richardson's legacy of spending, spending and then spending a little more:
Gov. Bill Richardson has been a strong advocate of the spaceport.

"The governor is very hopeful the vote will be successful and the project will move forward," said Gilbert Gallegos, a spokesman for Richardson. "The reality is the state has put in a lot of actual capital and committed a lot of time and energy to the project."

The tax would add a 25-cent charge to a $100 purchase. State lawmakers also have earmarked at least $110 million in capital outlay money over several years to help with startup costs.

In recent weeks, spaceport director Steve Landeene and other officials have worked to educate voters on what they see as the project's merits.
So, let's see, the Governor is apparently two for two. The new train requires new gross receipts taxes to support it. The new spaceport requires new gross receipts taxes to support it. I wonder what else the Governor has pushed through the legislature that will require new gross receipts taxes to support it.

Where's the outcry from all you people who support buying local? I've got to tell you if gross receipts keep going up, you're going to find more and more people making their purchases tax free online. The burden of these regressive spend and tax policies are on the poorest amongst us. How come the advocates for the poor are not crying out? I don't get it.

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Monday, February 11, 2008

Open Letter to Albuquerque Chamber of Commerce

Looks like a broad coalition of business associations have been successful in their efforts on behalf of New Mexico businesses in fighting an unwarranted, unwelcomed and economically crippling tax pushed by Governor Bill Richardson (subscription).
The House late Sunday narrowly passed a much weakened version of Gov. Bill Richardson's universal health coverage proposal.

On a 37-31 vote, the House passed a bill that had been completely rewritten over the weekend by the House Judiciary Committee. That bill eliminated Richardson's plan to require all New Mexicans to have health insurance and to tax some employers who do not offer their employees health insurance [emphasis added].
Of course, the one business organization that CANNOT claim this as a victory for common sense is the Greater Albuquerque Chamber of Commerce (GACC). The GACC was actually the only business organization whose leadership took it upon themselves to be vocal supporters of this seriously misguided legislation.

As such, the coalition made up of organizations, who remember that their first obligation is to protect their members interest, is taking this as an opportunity to remind the GACC of what it means to actually represent the interests of the business community:
An Open Letter
To the Greater Albuquerque Chamber of Commerce

Terri Cole, President/CEO GACC
Paul Sowards, Bank of Albuquerque
Don Chalmers, Don Chalmers Ford
Lonnie Talbert, Summitt Electric Supply
Rick Alvidrez, Miller Stratvert
Del Archuleta, Molzen-Corbin & Associates
Norm Becker, Manuel Lujan Insurance Inc.
Mike Burgess, KOB-TV
Frank Chavez, Pueblo of Sandia
Del Esparza, Esparza Advertising
Sherman McCorkle, Technology Ventures Cindy McGill, Public Service Company of NM (PNM)
Tom Morton, Albuquerque Convention Center
Cynthia Reinhart, KPMG, LLP
Ron Stern, Lovelace Health System
Cheryl Willman UNM Cancer Research Center
Greg Winegardner, Wells Fargo Bank NM
Michael Zientek, Gap Inc.
Eloise Gift, Keller Williams Realty

Dear Greater Albuquerque Chamber of Commerce Board of Directors:

It is of great concern that the Greater Albuquerque Chamber of Commerce (GACC) consistently takes positions on legislation and public policy issues contrary to the interests of New Mexico businesses and in direct opposition to the welfare of small businesses in the state. GACC’s latest position advocating for the inclusion of employer sanctions in the “HealthSOLUTIONS” bill is unfathomable.

“HealthSOLUTIONS” places an impossible burden on New Mexico’s small businesses. The bill mandates employers pay an annual penalty or tax to the state of up to $500 for each full-time employee and up to $250 for every part-time employee. The definition of employee includes those working only 90 days a year, and “full-time” is defined as working as few as 20 hours a week! Unbelievably, the bill would expand this tax by 2011 to all businesses, no matter how small – even one or two employees.

Under the GACC supported “HealthSOLUTIONS” proposal, small businesses would be penalized for creating more jobs. New Mexico’s small businesses often have narrow profit margins that can’t absorb a $500 per employee tax on job creation. We should be doing exactly the opposite – creating subsidies for small businesses that can’t afford to both create jobs and offer health insurance.

Small businesses are the very strength of New Mexico’s economy. The proposed “HealthSOLUTIONS” tax would be economically crippling to labor-intensive businesses, including small manufacturers, restaurants, hotels, family farms, and retailers. By supporting this poorly designed legislation GACC is clearly advocating punishing and penalizing the small business engine which creates vitally important new jobs in New Mexico.

The big businesses represented on the GACC board can afford to pay health insurance premiums to their employees and most probably do. Unfortunately, many of these big businesses are also laying off workers at alarming rates.

We do not believe that a small group of 18 individuals representing big business interests, heavily state regulated industries, and a few chosen suppliers have the right to speak for the entire business community. We resent and reject your ongoing claims to the public and legislators that you are the “voice of business”, especially small businesses which you clearly do not represent. You should be aware that GACC is the only business group in favor of this healthcare proposal. Several other business organizations have formed an employers’ coalition to strongly oppose the “HealthSOLUTIONS” legislation. These groups include:

Association of Commerce and Industry
Associated Builders and Contractors
Dairy Farmers of America
Dairy Producers of New Mexico
Independent Petroleum Association of New Mexico
National Federation of Independent Business
New Mexico Farm and Ranch Bureau
New Mexico Grocers Association
New Mexico Ground Water Association
New Mexico Petroleum Marketers Association
New Mexico Restaurant Association

Your position on healthcare is yet another example of a long history of questionable policy making by the GACC. Your recent support of an increase in the minimum wage at the state level is another. The fact that you have yet again taken a politically expedient position, contrary to developing a vibrant private business climate in New Mexico, is no longer surprising. However, this year you miscalculated if you thought that we were going to sit quietly on the sidelines while you misrepresent the impacts of the proposed healthcare legislation on small businesses of New Mexico. In light of the severe impacts to small businesses and citizens of the state, we urge GACC to reconsider your position on healthcare legislation.
As a small business owner (and seriously reconsidering GACC member), I applaud this letter and fully support its message. I hope that if you are a business owner reading this blog, you will add your name in the comment section urging the GACC to reconsider their stance.

The bill as originally devised no longer exits. But, if the GACC wants to redeem itself, it must now issue a statement saying that, "We've heard the message loud and clear from our members and realize that our position in support of this bill was wrong. As such, we revoke any support for this legislation, and furthermore pledge to fight any future legislation that results in new taxes for New Mexico businesses."

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Monday, February 04, 2008

Best Line of the Day

If you haven't been over to the Rio Grande Foundation's blog, Errors of Enchantment, in awhile, you're missing out. Paul gets the award for the best line of the day:
The fact is that governments should not be in the business of molding us into better people. Governments should leave smokers, fat people, couch potatoes, and others alone.
Amen to that!

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Wednesday, November 28, 2007

Rapidly Moving in the Wrong Direction

A couple of weeks ago I read an article in the New Mexico Business Weekly about the funding challenges faced by the art scene. In particuliar this really resonated with me [emphasis added]:
Chief among the challenges is funding.

This is due, in part, to the metro area's lack of a large corporate base and a small philanthropic community. But BBER also lays some blame on the "excessive focus" of the public sector on the area's largest institutions, such as the Albuquerque BioPark. The BioPark and the science museums get the largest individual slice of city expenditures for culture entities (about $11.3 million in 2004).

When I was in the not for profit sector, I was painfully aware of the lack of a large corporate base, and its no different running a service based business. We just don't have enough corporations headquartered in New Mexico. Sure, we're doing a good job of attracting startups, but what we really need are a few blue chip companies to move into the state.

This is going to be especially true after the 2008 election cycle. Let's face it, in the House and the Senate seniority is king, and we're about to have an 80% freshman delegation. Ouch! My prediction is that we are going to start bleeding federal dollars to the tune of $1 billion dollars.

Does this mean that all is lost? No. However, it does mean that we need to get serious about attracting big business to New Mexico. The problem is that according to a recent study by the New Mexico Tax Research Institute (Hat tip: Capital Report) it looks like our tax policy is evolving in such a way to repel rather than attract big business to New Mexico:
The New Mexico Taxation and Revenue Department just released its gross receipts tax (“GRT”) rate tables applicable for the six months beginning January 1, 2008. For the first time in history, New Mexico has not just one, but five jurisdictions that will see rates in excess of 8%.

Taos Ski Valley leads the pack at 8.4375%, with Red River, Logan, San Jon, and Tucumcari also coming in at 8% or higher. Nineteen other locations will have rates between 7.5 and 8.0%, including Taos, Santa Fe, Espanola, Ruidoso, Raton, Portales, Las Vegas, Bloomfield and Aztec. While rates have historically been higher in tourist destinations, the higher rates seem to be more contagious to other locales lately. Albuquerque rates remain unchanged at seemingly modest 6.875%, however that’s still 18% higher than in 2003 when purchasers in the state’s largest city enjoyed rates below 6%. The new rate schedules are posted on the Taxation and Revenue Department’s website’s homepage.
I've said before that in the last few years the Governor has been playing a shell game with our tax system. Governor Richardson loves to portray himself as the tax cutting Governor, but the reality is that under his guidance taxes in the state have been increasing at an alarming rate, and due to the policy in place, we could see municipal taxes in excess of 10%!

This trend needs to be reversed, and it needs to be reversed quickly. High taxes combined with a loss of hundreds of millions in federal dollars is the perfect recipe for an economic disaster in New Mexico.

One simple solution. Get rid of corporate income tax in New Mexico. We could become one of only four states in the nation to have this key competitive advantage. The cost for getting rid of corporate income tax is only about $300 million in revenue. Considering what Governor Richardson has spent chasing trains, spacecrafts and movies, that's nothing. Right now the other states that have no corporate income tax are South Dakota, Nevada and Wyoming. Now compare our quality of place to those other three, and it becomes obvious that we would jump to the head of the line.

We need to stop playing with special incentives for one industry or another, and instead have a tax policy that induces all large successful businesses to call New Mexico home.

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Wednesday, November 07, 2007

Guess I Won't Be Moving

Actually, we weren't planning on moving. But, it looks like those who moved in 2006 have gotten a nasty surprise (subscription):
[County Assessor Karen L.] Montoya said her office also has been hounded by people who bought homes in 2006— roughly 20,000 were sold— and were not aware that home sales take away the 3 percent cap.

She said people have been telling her they wouldn't have bought their homes if they had known what the property taxes were.

"Sometimes they're shocked," she said.

Those homes sold in 2006 are seeing, on average, a 50 percent increase in assessed value, Montoya said.

The result is that someone who has just bought a home might be paying hundreds or thousands more than a neighbor who has lived in the same home for years.
So, how are the people who have stayed in one place making out? Well, I just pulled out my Bernalillo County property tax bill from 2002 and compared it to my 2007 bill. Talk about sticker shock. I am paying 35% more in property tax than I was paying just five short years ago.

Hmm, I don't seem to be receiving 35% more in services, so exactly how does that work?

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Wednesday, October 03, 2007

Looking Forward to Crumbling Roads

Governor Bill Richardson is being called to the table on his duplicitous stance regarding Rail Runner funding (subscription):
[Sen. Tim Jennings, D-Roswell] said he recalls lawmakers and Richardson administration officials talking about the plan [to raise taxes] in 2004.

"They pretty much said, 'We're going to have to do this,' '' Jennings said in an interview Tuesday.

The Rail Runner now runs between Belen and Bernalillo at an operating cost of about $9.5 million a year. More than $8 million of that is paid by the federal government, but that funding disappears in 2009.

That will happen just as operating costs are projected to rise to $20 million a year with the extension of service to Santa Fe.
It also coincides with the time that Governor Richardson is hoping to abandon the state of New Mexico for the greener pastures of Washington D.C. The financial house of cards Governor Bill Richardson has built through his spend, spend, spend policy is about to come tumbling down, and as has long been predicted "
New Mexico will be on the hook for several projects that will cost millions of dollars in coming years."

So, where does this leave us?
Sen. John Arthur Smith, D-Deming, chairman of the Legislative Finance Committee, said the state needs to find a funding source— and quickly.

New Mexico is struggling with a huge funding gap for its highway system, estimated by some at half a billion dollars. Critics of the Rail Runner project fear operating costs will eat into money better used on road construction and maintenance.

"The administration is saying it will find other sources," Smith said. "Who's going to be sacrificed? I'm submitting that it will be the state's roads."
Nice. Think about that during your morning commute.

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Sunday, September 30, 2007

The Much Sought After Billionaire Vote

It's a pretty rare occasion that I can find anything on SWOP blogger worth linking to, but I have to admit, this SWOP post did give me a chuckle:
That's where in steps Bill Richardson with a tax increase [to support the Spaceport], not to the billionaires who don't even live in NM, but to Doña Ana County Residents. They had to flip the bill.

Now let's visit today's paper. Front Page news "Governor won't back rail tax." This tax would be for the expansion of the RAIL RUNNER which means PUBLIC TRANSPORTATION for NM residents that we so desperately need. I would GLADLY pay that tax.

I ask you Mr. Governor Richardson: Where are your priorities? Are you trying to appeal to the billionaire vote? The republican "no taxes, smaller government" party? Or the NM families that need a public transportation system that will get them to and from their jobs in an affordable way?
Well SWOP, let me assure you that its too late for Governor Richardson to appeal to the "no taxes, smaller government" folks. He blew that when he grew the state budget by nearly $2 billion over the last couple of years. The tone of your post suggests he has done himself any favors with the public transportation enthusiasts. So, I guess the answer to your questions is that Governor Richardson is in fact trying to appeal to the billionaire vote.

Ouch. Good thing he is term limited as Governor, I don't think there are enough billionaires in New Mexico to help him carry the next election.

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Friday, September 07, 2007

Paying for the Governor's Follies

It was bound to happen. New Mexico has "enjoyed" a Governor who likes to spend, spend and then spend a little more. Governor Bill Richardson has given us expensive trains that hardly anyone takes and spaceports that no one uses all on the public dime. Time and time again we were assured that this was not going to take away funds from other transportation projects. Well, it looks like the bill has arrive (subscription):
Increasing New Mexico's 17-cent gasoline tax by 6 percent a year— or about 1.3 cents a year for the first decade— could go a long way toward building and repairing the state's roadways, leaders of a highway construction task force said Thursday.

Rep. Patricia Lundstrom, D-Gallup, and state Transportation Commission Chairman Johnny Cope head up a group looking for ways to pump extra money into the state's financially troubled highway construction programs. They both said they like the idea of automatically raising the gasoline tax each year.

Each additional penny to the tax would generate roughly $6.8 million a year for spending on state roads.

A second revenue-raising idea has also caught their fancy, the task force leaders said: a new state fee of an undetermined amount on vehicles based on weight.
Have these folks lost their mind? They've allowed the state budget to almost double over the last few years, and now they want to bring in more money by increasing taxes and fees. How much more money do they need?

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Tuesday, August 28, 2007

What's Worse Than Tax Holiday

I wrote not long ago about how ridiculous New Mexico's back to school tax holiday is because there is little rhyme or reason to the exemptions. Well, leave it to Santa Fe City Council to top that absurdity:
The City of Santa Fe, New Mexico, has a budget shortfall of $200,000 that it needs to fill. Every city, county and state faces this dilemma, and there are only two policy options: cut spending or raise taxes. To no one's surprise, the city council has chosen to raise taxes, but people should be surprised at the dreadful choice of tax the council has made. Instead of a tiny hike in a broad-based tax that most people in the city pay, it has chosen to violate every principle of sound fiscal policy by raising taxes on specific "unhealthy" products.
Yeah, that's brilliant.

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Wednesday, May 09, 2007

A Bad Precedent

A follow up to my last post as reported in today's Albuquerque Journal (subscription):
Voters were supposed to decide last November whether to renew the open-space tax, which amounts to about $8 a year on a $100,000 home. The tax had been approved at the polls in 1998 and 2000 but expires this year.

County administrators, however, forgot to put renewal of the tax on the Nov. 7 ballot last year.

The commission's vote Tuesday imposes the tax at a reduced rate. It will now amount to $3 a year on a home valued at $100,000 and will generate about $1.1 million a year. The existing tax has been generating around $2.5 million a year.

It will remain in place until it can be put before voters in November 2008, county officials said.

Voting in favor of the budget package, which included the tax, were commissioners Alan Armijo, Tim Cummins, Teresa Córdova and Deanna Archuleta.

Michael Brasher voted against it. He said he had questions about whether the county had solicited public comment in developing the budget.

Brasher also said he had concerns about whether the tax is needed immediately, as the county's open-space fund already has a balance of about $9 million available.
Is Michael Brasher the only sane voice on the Commission? I believe the answer is a resounding, "YES."

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Monday, May 07, 2007

Just a Little Too Convenient

It wasn't that long ago that the City of Albuquerque tried to sneak a tax past unsuspecting Albuquerqueans. Unfortunately for the city, an uproar ensued, and the sleight of hand met a much warranted timely demise.

Apparently, some members of the Bernalillo County Commission learned nothing (subscription) from the Albuquerque experience:
Bernalillo County commissioners this week will consider imposing an open-space tax to help make up for a proposal left off the ballot last year.

Voters in November were supposed to decide whether to continue a tax to fund the acquisition and maintenance of open-space lands, but the question wasn't included on the ballot— the result of an "administrative error," a spokeswoman said.

The property tax generates about $2 million a year and amounts to around $8 a year on a $100,000 home. Voters approved the tax in 1998 and 2000, but it's set to expire this summer.

The county is now considering whether to enact an open-space tax without voter approval.

The proposal would impose a tax smaller than what has been in place. It would amount to around $3 a year for a $100,000 home and generate $1 million annually.

If county commissioners take no action— or reject the latest proposal— revenue from the existing tax will dry up this summer.

County Commission Chairman Alan Armijo said he plans to support the tax measure.
On second thought, this is worse than the sleight of hand that the city tried to pull. Commissioner Alan Armijo actually wants us to reward incompetence with a tax increase. But, that's not the most offensive part. This is:
The tax proposal isn't as big as what's been in place because the county wants to start small for now and "look at a bigger package in the future," Armijo said.
I believe in the used car business this is known as the bait and switch.

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Wednesday, April 11, 2007

It's Like a Sale at Macy's

Paul Gessing over at Rio Grande Foundation had an interesting opinion piece recently published in the Albuquerque Journal (subscription) which began:
Albuquerque Mayor Martin Chavez has proposed a one-eighth cent reduction in the gross-receipts tax rate. If the City Council goes along with the plan, the rate charged within the city would drop from 6.875 cents to 6.75 cents on each dollar spent, and $18 million that would have been budgeted by the city would be returned to taxpayers.
I've been asked by at least one individual in Mayor Martin Chavez's administration, why aren't we - the Republican blogosphere - all over this. We're talking about a tax cut that is worth in the neighborhood of $200 million when all is said and done. Shouldn't we be singing Mayor Marty's praises? Heralding the fact that he is a tax cutting Mayor. Applauding his sense of financial control. You know, the type of guy we could all get behind for Governor in 2010.

Well, to understand the reason for the lack of enthusiasm, you only need to read the rest of the opinion piece:

Gross-receipts tax rates in Albuquerque have jumped in recent years. The current 6.875 percent rate is 18 percent higher than it was as recently as 2000, when the rate was only 5.8125 percent.
That's right in the span of six or so years, we've seen a whopping 18% increase in the gross receipts tax. Today, it is a full 1.0625% higher than it was just six short years ago. Yet, Mayor Chavez can't understand why we're not heralding him as a conquering hero for offering to give back 0.125%. If that 0.125% give back is worth a couple of hundred million, just how much did that rapid tax increase steal from the back pockets of hardworking taxpayers?

We're not excited because it is just not enough. However, with that said, I'll take what I can get, so I do support the return of our money. I also would recommend that any Republican on the City Counsel considering not supporting the tax cut, immediately stop by the County Clerk's office and change their registration to Democrat because that's where they will need to look for support the next time they are up for re-election.

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Monday, January 29, 2007

Nonsensical Rate Increases

I frequently travel out of state on business. I've always liked how easy it is to get in and out of the Sunport. And as a small business owner, I've also appreciated how inexpensive parking can be.

Leave it to Mayor Martin Chavez to mess with that (subscription):
The city Aviation Department is seeking authorization to increase rates for short-term and long-term parking. City councilors are considering the proposal.

For short-term parking, the rate for 24 hours would go from $7 to $9. After 72 hours, the daily rate would go from $10 to $12.

The long-term rate for 24 hours would rise from $6 to $8. After 72 hours, the daily rate would go from $8 to $11.

Airport officials say the rate increase would bring Albuquerque more into line with other cities. "We have been looking at what is done at other airports our size, and we are far below what they charge for parking," said spokesman Daniel Jiron.
Re-read that last paragraph. Mr. Jiron is not saying we need additional revenue to cover costs. Instead, he is saying that he just wants to bump up the costs because other municipalities charge more. Would somebody please explain to the goofballs what it means to have a competitive advantage?

This is at minimum a $1.7 million tax increase on anyone who flies. A completely unnecessary tax increase I might add. Worse yet, if the City raises the parking fees by the proposed 20-30%, then all of the private parking lots around the airport will raise their fees accordingly. This is a perfect example of government artificially driving up costs.

I hope our City councilors have more sense than the Mayor's aviation staff.

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