The Dem. tax, rev and budget leadership have a history of making last minute changes, usually not to our liking. Check out what the Tax Bill HB547 includes and why it is worth fighting to keep as is. This is the best tax plan I’ve seen at the Roundhouse. We also cover the extraordinary Sen Conservation hearing for SB 520, a most instructive hearing with Retake, YUCCA and NMOGA all challenging the bill. How could that happen? Read On!!!!
HB 520 a Law or a Bumper Sticker?
HB 520, one of those public peace dummy bills used to introduce bills after the deadline for introducing bills, a surreal concept in itself. if you want to create a deadline for introducing bills, why then provide easy access to an escape hatch, allowing bills to be introduced after that deadline has passed? In any case, this was a very important and contentious piece of legislation and deserved to have been introduced earlier with a legitimate bill title that conveyed its importance and more time to allow for committee amendments to fix some of the problems in the bill. As is, we almost missed the bill entirely.
The bill’s intent is commendable: to establish and codify greenhouse gas emission limits, requiring reporting on those emissions, establishing gas capture requirements and asking that certain agencies apply climate equity principles to policy development and rule making. Easy to see why NMOGA would be opposed, they never saw an impediment to profit that they liked, but YUCCA and Retake? The devil is in the details or the absence of detail.
In public comment, after NMOGA and other industry and agricultural lobbyists offered their views (the sky will fall, milk prices will skyrocket, O&G operators will leave NM, the usual), Several enviro groups and Retake opposed the bill for very different reasons.
- The bill lacks any enforcement mechanism, you set goals, but then what?
- The bill should measure down stream impacts caused by NM G&O exports;
- Ensure that “beneficial reuse” won’t be used for hydrogen
- Include funding sufficient for NMEnv Dept to actually inspect wells, as is, reporting on methane leaks is by industry self-report.
In any case, you may never again see Retake and NMOGA on the same side. However it is worth noting that NMOGA was asking sponsors to weaken the bill, we were opposed because it wasn’t strong enough and it had no teeth.
And Here is the Lesson Learned
Bill Sponsor, Sen Pro-Tem Mimi Stewart, started her presentation by noting she expected to get hammered on both sides and she didn’t seem happy about that. During public comment, the bill did indeed, get hit from both sides. During committee discussion, Stewart noted that she and CVNM had met with stakeholders (i.e. G&O) but in the end they could not be satisfied and remained opposed. Message to legislators: any climate bill of merit will always be opposed vigorously by G&O. Why even try to get their approval? Every time you do, you offend genuine environmental advocates.
Stewart was pressed by Sen. Cervantes who asserted what YUCCA, Retake and others had claimed; the bill has no teeth, it is aspirational, but not law, repeatedly calling the bill not a law , but a memorial. “We’re here to write laws,” Cervantes said. “We’re not here to write Hallmark cards.” He stated that the emissions goals were clearly written and specific, but he went on to say that there is no enforcement in the bill, so if you don’t meet the goals who cares? He even questioned why NMOGA even bothered to oppose the bill. From this morning’s New Mexican, Cervantes added.
“I tell all the opponents here, ‘What are you worried about?’ ” he said. “There’s no consequence in this bill, so sleep well, ag or oil or gas because we’re giving you our hope and our dream and our T-shirt slogan and our bumper sticker, but we’re not really telling you that if you don’t do this, anything’s gonna happen to you, so sleep easy.”
In response Stewart claimed that if they had included penalties, NMOGA would have filled the room and gone nuts. My reaction was: so what! But then it occurred to me the bind that Stewart was in: if NOMGA goes nuts and the bill passes nonetheless, it will get vetoed by a Governor who is not at all fond of challenging gas & oil. So, if she builds a bill with teeth, she gets hammered by G&O and the business community and somehow gets the bill through both chambers, her reward would almost certainly be a veto and a place in the Guv’s doghouse as the Guv does not want to veto a climate bill, but she wont sign it either. She relies on the legislature to protect her image, by keeping good climate bills far from her desk.
It is great to have a session with gun violence bills and reproductive health care rights bills passing, and a professional legislature doing well, but then you look at climate legislation and we see a virtual zero, with most energy spent repelling false solutions and little energy put into creatively passing genuine solutions. While it does appear that important geothermal legislation may pass this year, affording another renewable energy option for our NM energy consumption and an EV and/or storage tax credit may pass , but neither EV tax credits nor geothermal will do a thing to mitigate the impact of unchecked methane releases. A strong climate bill with clear methane emissions rules and a powerful enforcement arm would. And so another year passes at the Roundhouse, as the earth warms and Nero fiddles.
So What Can We Do?
Clearly expecting to develop legislation that satisfies the gas and oil industry and secures support from environmentalists is not achievable. Given the extractive industry’s intransigence, any climate bill that enjoys support from gas & oil, ipso facto will result in fierce environmental opposition. Maybe it is time to stop placating NMOGA and start placating environmental organizations. In the hearing, Sen Cervantes suggested he would be willing to work with others to write a climate “law” with enforcement, not yet another climate “memorial.”
Let’s do it in 2024. We may not have enough votes to get it to the governor or enough power to get her to sign it, but the process will expose who are our allies and who are not willing to challenge NMOGA. Stay Tuned.
On a More Positive Note An Omnibus Tax Bill to Be Proud of
MLK & Rev Barber called tax policy and budgets moral documents well before Retake did, but we assert it often and each year find us arguing to amend the budget to include child tax credits or to make changes to the personal income tax to finally make it reasonably progressive and equitable. But this year, the bill developed in the House is damn near perfect. It needs our support. Kudos to Voices for Children for leading the charge. Read on. Then Act with guidance at the end of post.
HB 547 House Omnibus Budget Bill
Retake Our Democracy has long viewed tax and budget policy as involving moral decisions as they reflect where you are willing to use your revenues and where you are not willing to use your revenues. Who you will help and who will go without help. It also reflects who the state thinks should pay the necessary tax revenues, who will sacrifice and how much will they sacrifice for the common good. In seven years of advocacy at the Roundhouse HB 547 is the single best tax bill I have seen. It masterfully balances the need for state revenues to support programs for education, public safety, infrastructure and more, while also investing those tax dollars directly in people and small business owners.
During its hearing in house Tax and Rev committee we heard from many of the stakeholders whose industries were going to incur taxes. I heard none of the usual draconian cries, “implement that tax or remove this business tax credit and the sky will fall.and NM will dissolve into chaos.” Most comments reflected that they were pleased with the overall intent of the bill but that the tax imposed on their industry was just a little bit too large or unfair, and sought redress to address those concerns.
In my public comment, I asked legislators to resist the temptation to respond to these requests to adjust the tax bill, referencing how the delicate balance of what is in the current bill would collapse if legislators started tinkering with line items here and there, as every adjustment to any one line item will have an impact on the overall balance of the bill achieved through months of negotiations to arrive as HB 547. The current version has emerged after many committees and many interim hearings Many advocacy groups and many stakeholders have had an opportunity to provide input into this bill over a period of months and what has emerged reflects that input, and taken together, is indeed a deeply moral, compassionate and just tax package that should be passed without amendment. Below you will find some of the most important elements that Retake celebrates and that should not be amended.
We ask that you begin writing to members of Senate Tax, Business and Transportation and Senate Finance Committees, now, and then again when the bill has passed the House floor (we’ll alert you). We’ll ask that once it is assigned to Senate Tax and Business, you again write to members of that committee and assuming it passes Senate T,B & T you begin writing to members of SFC where tinkering is most likely. Geting your message to committee members is far more likely to work, if you reach them before the bill is scheduled for hearing, when in boxes explode.
Lead your email with a general comment applauding the comprehensive tax reform effort that HB 547 represents and noting how it restores progressivity to the tax code at every turn. Then, using Voices summary below, offer comment on specific elements that you particularly appreciate. In each comment include that you know that lobbyists will be seeking amendments benefitting their industries but to maintain the delicate balance of this bill requires not making those amendments, so please pass the bill as is. nWe ask that you also call committee member offices with the simple statement: “please do not amend HB547 at all. Every piece is important.”
Important elements of the bill
Increasing the Child Tax Credit for low-income families to $600 per child
Introduced as HB144, sponsors: Rep. Chandler, Chairman Lente, Sen. Stefanics
- Increasing the Child Tax Credit will benefit 350,000 New Mexico kids.
- Increasing the Child Tax Credit will improve racial and gender equity in the state.
- The state’s Child Tax Credit is one of the most effective ways to help families – especially those earning low incomes – because parents know best how to meet the needs of their families.
- Our children face many barriers to success – the primary one being poverty. By helping address that issue, we’ll get better outcomes on all of the money we’re investing in our children from birth to college.
- Increasing the Child Tax Credit will
- provide $105 million more in benefits for NM families, with $12 million going to Native American families in the state
- provide up to $600 per child for families most in need
- benefit as many as 27,000 grandparents raising grandchildren
- improve economic equity for families of color and women
- increase fairness in our state tax system
- Credits like the Child Tax Credit are linked to improvements in infant and maternal health, decreased poverty, reduced childhood hunger, better test scores, higher graduation and college attendance rates, and increased earning power for children as they become adults
Personal Income Tax (PIT) Restructuring— adding progressivity to our PIT
Introduced as HB 119, sponsors are Rep. Chandler, Chairman Lente, Sen. Wirth
- The proposal to reform PIT will cut taxes for 94% of New Mexicans (and helps pay for it by ensuring that the top 6% of earners in the state pay more of their fair share)
- We’ve talked about reforming our tax system for years. This historic surplus gives us the perfect opportunity to do that.
- This restructuring of personal income tax rates for the wealthiest earners will make our tax system more fair and more racially, ethnically, and gender equitable.
- Cutting PIT rates for those at the top of the income scale has failed as an economic development strategy. It’s also made it more difficult to invest in the things that improve our economy and our quality of life – education, health care, roads and bridges, public safety and more.
- We’ve improved our tax system, so it does not put most of the responsibility on those who earn the least anymore. Still, those who earn the highest incomes – in the top 1% – pay the lowest effective tax rate of all income levels.
Capital Gains Deduction
Introduced as HB 120, sponsors: Rep. Chandler, Chairman Lente, and Sen. Wirth
- The 40% capital gains deduction means that income from things like the sale of stocks and bonds isn’t taxed fully (in other words, that taxes aren’t paid on 40% of that income)
- The IRS calls capital gains “unearned income” because it does not come from wages. It’s the money that your money makes for you. That’s why so much of the benefit goes to so few – you’ve gotta have money to invest to make unearned income.
- Most people agree that it’s wrong to tax the wages of hard-working New Mexicans more than we tax unearned income.
- Tax preferences like this one are one of the ways that our tax system is inequitable – racially, ethnically and by gender. It assists those who already have wealth – helping them create more wealth.
- Reducing the capital gains deduction would raise and diversify revenues ($70m) and would improve fairness in our tax code.
- 91% of capital gains income in NM goes to just 14% of New Mexicans – those earning more than $100,000. That means, the vast majority of the value of this tax break goes to those who least need it.
Gross Receipts Tax (GRT) Reduction
- NM’s gross receipts tax is a regressive tax. While it was designed to have a broad base and a low rate, over the last several decades, numerous carve-outs have forced the rate to creep up. Likewise, cuts to other taxes like personal and corporate income taxes have forced the GRT rate to rise over the last couple decades.
- Reducing the GRT rate will benefit both families and businesses while reducing regressivity in our tax code.
- Reducing the overall GRT rate avoids picking winners and losers in our tax system and provides the tax cut benefit to all – families and businesses alike.
- Equity impacts: because the GRT is one of the most regressive taxes, reducing this tax improves both income and racial equity.
Tweets to uplift: If you tweet, please share these on twitter and direct tweets to legislators with accounts. I don’t Tweet (funny story, for another time), so i can’t offer advice as to how to do this or how to direct Tweets to legislators. But if you tweet, youi’ll know!!!
- 350,000 NM kids will benefit from increasing the CTC
- Increasing the CTC will provide economic opportunity to Native American families
- 74% of New Mexicans support increasing taxes on wealthy earners
- 80% of New Mexicans support increasing corporate tax revenues
- 72% of New Mexicans support increasing the CTC
- Capital gains deductions benefit wall street, not main street
From Voices: An excellent opening comment for written or oral comment as it captures the principles driving the bill.
“We’re VERY pleased that the proposed bill improves economic opportunity for families, addresses tax fairness and racial and gender equity, and preserves revenue adequacy and diversity.”
Then choose from any of the things you like most about the bill and feel most important to preserve. Here are just some of the elements of the proposed bill that Voices (and Retake) believe are great tax policy ( if you want more detailed descriptions, see above, but for public comment you can’t go into detail on more than one component:
- Reforms the personal income tax (PIT) rate schedule to lower taxes for 94% of New Mexicans, virtually all our low- and middle-income filers while raising taxes for only the very top 6% of New Mexicans at the top of the income scale.
- Reduces the unfair capital gains tax break for investment income.
- Increases the new Child Tax Credit (CTC) up to $600/child for low-income earners, moving hundreds of thousands of children out of poverty!
- Improves corporate income tax (CIT) collections.
- Improves the Low Income Comprehensive Tax Rebate (LICTR) for low-income filers.
- Cuts the state GRT rate to benefit both businesses and families.
- Includes temporary tax rebates to provide financial relief.
- Increases some alcohol and tobacco taxes.
- Enacts an electric vehicle tax credit, and so much more
Please use the info above to contact members of the Sen. Tax, Business & Transportation Committee. please do this today (Wednesday) and save this blog, as when this bill goes to Sen Finance, we will be encouraging more action. See STBT contact info at bottom of post. Thank you in advance for your action. This is VERY important as the bill will be subject to industry pressure in both committees.
Zoom Huddle: Let’s Talk It Out; Weds 6-7 pm
We’ll talk about the extreme challenge of passing meaningful climate legislation and what we might be able to do differently in future sessions. Are organizations passing violence prevention, tax reform and gender-focused and reproductive healthcare doing anything differently from which we can learn? We will also update on this week’s developments and where to place energy in the last week. Join us. This is a great way to learn the ropes.
You must register to attend, cli ck here to register.
In solidarity & hope,
Paul & Roxanne
Senate Tax Business Transportation Committee Members–-let ’em know what you want!
- Chair: Benny Shendo, Jr. (D). District 22 (Bernalillo, McKinley, Rio Arriba, San Juan & Sandoval). Room 323A, 986-4310. Email: firstname.lastname@example.org
- Vice Chair: Carrie Hamblen (D). District 38 (Doña Ana). Room 416G, 986-4266. Email: email@example.com
- Ranking Member: Gay G. Kernan (R). District 42 (Chaves, Eddy & Lea). Room 415E, 986-4274. Email: firstname.lastname@example.org
- Member: Craig W. Brandt (R). District 40 (Sandoval). Room 109B, 986-4385. Email: email@example.com
- Member: Ron Griggs (R). District 34 (Doña Ana, Eddy & Otero). Room 414A, 986-4391. Email: firstname.lastname@example.org
- Member: Leo Jaramillo (D). District 5 (Los Alamos, Rio Arriba, Sandoval & Santa Fe). Room 416C, 986-4487. Email: email@example.com
- Member: Linda M. Lopez (D). District 11 (Bernalillo). Room 120A, 986-4380. Email: firstname.lastname@example.org
- Member: Joshua A. Sanchez (R). District 30 (Cibola, McKinley, Socorro & Valencia). Room 414B, 986-4375. Email: email@example.com
- Member: Bill Tallman (D). District 18 (Bernalillo). Room 300C, 986-4373. Email: firstname.lastname@example.org
- Member: Peter Wirth (D). District 25 (Santa Fe). Room 119, 986-4727. Email: email@example.com
Bulk mail: “Craig W. Brandt” <firstname.lastname@example.org>, “Ron Griggs” <email@example.com>, “Carrie Hamblen” <firstname.lastname@example.org>, “Leo Jaramillo” <email@example.com>, “Gay G. Kernan” <firstname.lastname@example.org>, “Linda M. Lopez” <email@example.com>, “Joshua A. Sanchez” <firstname.lastname@example.org>, “Benny Shendo” <email@example.com>, “Bill Tallman” <firstname.lastname@example.org>, “Peter Wirth” <email@example.com>