COMMENTARY: There has been a lot of talk about how to fill New Mexico’s disastrous state revenue shortfall. Taxing out-of-state online merchants for purchases made in New Mexico is a commonsense fix and past due. New Mexico’s small businesses have been at a competitive disadvantage for too long.
Taxing food, however? There are other ways to create revenue that make more sense in a state with the second highest rate of food insecurity among children.
But the bigger issue is that New Mexico’s tax code needs a more fundamental fix. We know it needs to incentivize job growth, but thanks to the hard lessons of decades of economic policy data we know that the slash-and-burn approach to the tax code is not the way to do it.
As Sen. John Arthur Smith says, “You cannot cut your way to prosperity.” Job growth increases family wealth; creates reliable, sustainable revenue for critical state functions; and makes New Mexico attractive to new and homegrown businesses.
Governor Martinez is likely proud of her record of pushing tax cuts, following an old ideology that gained prominence 40 years ago. In fact, her recent budget proposal clings to this discredited theory, and pays for it in part by cutting the salaries of teachers, public safety and emergency service personnel, and other hardworking New Mexicans who work every day on behalf of all of us.
Unfortunately for New Mexico, her tax cuts have resulted in one of the worst state economies in the country. We only have to look right across our state lines to see the economies of Arizona and Colorado moving forward. Meanwhile, our economy is getting worse. The Land of Enchantment has a deficit measured in the hundreds of millions of dollars and young people are fleeing our state in search of better employment opportunities.
All of us ― no matter our political party or whether we live in rural or urban areas ― need to work together to turn New Mexico’s economy around. The first step is to get rid of the outdated “tax cuts create jobs” ideological myth and replace it with an evidence-based approach. The governor’s ideology ― put into real policies in her proposed budget ― has not only failed to create jobs, but it’s also reduced funding for education ― the clearest pathway to economic success, by any measure.
In short, for New Mexico, “no new investment” has meant “no economic recovery.” We must replace this old ideology now before it harms our economy even more.
Strong economies have relied upon 21st Century strategies, like:
- Revenue to fully fund education, health care, job creation, and public safety ― all investments that will bolster and turn our state economy around.
- Revenue that is raised in a way that is equitable, reduces poverty, and asks those who have more to pay more.
- Revenue sources that are sustainable and diversified.
- Policy decisions based on data, a proven track record, and sound projections, not discredited ideology.
Looking forward, New Mexico needs practical solutions to these problems created by the governor’s old ideology. We need to make sure that out-of-state corporations pay their fair share; increase taxes on the richest so they pay the same rate that the rest of us pay; demand accurate accounting for all tax giveaways; and create new, diversified revenue streams by expanding renewable energy production.
The outdated, disproven ideology of the last six years is holding New Mexico back. This governor has failed to present new ideas and has ignored existing problems.
We deserve better so that New Mexico’s economy can join the 21st Century. We need a proven approach to taxation and investment to transform New Mexico’s economy so everyone has an opportunity to better themselves.
James Jimenez is executive director of New Mexico Voices for Children and has worked with state and city budgets for many years.