We know Gov. Susana Martinez wants reform of the state’s swiss-cheese gross receipts tax as part of a budget deal in the special legislative session that begins Wednesday.
And the author of the bill, Rep. Jason Harper, R-Rio Rancho, on Tuesday released a summary of the bill to the Albuquerque Journal.
But there’s much we don’t know. The public hasn’t seen the legislation being pushed by Martinez and House Republicans, which is more than 400 pages. Neither have House Democrats. It doesn’t appear senators have seen it either.
And in a chaotic special session, it’s unclear how much time there will be for policymakers to read the bill or staffers to provide solid fiscal analysis.
Martinez, a Republican who has called herself the most transparent governor in the state’s history, has said she wanted a deal worked out before the special session to save taxpayers money. It costs the state about $50,000 each day the Legislature is in session.
But Peter St. Cyr, executive director of the N.M. Foundation for Open Government, says there’s a more important interest than saving some money — transparency.
“We think the public should be able to see the bill and have enough time to be able to weigh in — rather than this other objective, which is to save $50,000 a day,” St. Cyr said. “We don’t want any policy decisions being made behind closed doors without public input.”
NMPolitics.net has asked the governor’s office, Harper, and House Minority Leader Nate Gentry, R-Albuquerque, for a copy of the bill. Gentry said Harper would introduce it this afternoon. It will take some time after that for the bill to be posted on the Legislature’s website for the public to read through official channels.
St. Cyr said there’s a lot at stake, and the public should have access to information and the decision-making process. “This is the state’s biggest issue right now, how we’re going to deal with the budget shortage,” he said.
There’s little disagreement about the need for GRT reform. There are nearly 400 exemptions to the tax — and if they had all sparked the economic growth that was intended, the state’s economy would arguably be in much better shape.
Martinez has said such reform must be part of any deal in the special session to balance the budget and restore the funding for higher education and the Legislature that she vetoed in March.
Because of the transparency issue, House Speaker Brian Egolf, D-Santa Fe, says the tax bill is dead on arrival in the special session.
“It’s not fair to the public,” Egolf was quoted by the Albuquerque Journal as saying. “It’s not fair to the affected businesses. It’s not fair to the media. It’s not fair to the legislators to ask them to vote on something they haven’t read.”
That’s probably in part because in 2013 many Democrats went along with a massive tax-reform bill Martinez wanted, which passed the Legislature in the final moments of the session with no time for public scrutiny or fiscal analysis. Many Democrats now say that bill didn’t help the economy — and they were widely criticized, as were Republicans, for the lack of transparency.
The gap between Egolf’s stance and the governor’s demand makes the outcome of the special session uncertain.
“If the speaker doesn’t want to consider tax reform, then he shouldn’t waste time passing tax hikes, because they will all be vetoed,” Martinez spokesman Mike Lonergan was quoted by The Santa Fe New Mexican as saying.
If higher education and legislative funding is restored without new tax revenues or additional cuts, the state’s budget won’t be balanced for the fiscal year that begins July 1, as is required by the N.M. Constitution.
According to the Journal, the summary of the tax bill Harper provided the newspaper says it would eliminate “dozens” of GRT exemptions and reduce the overall GRT rate by about 1 percent. It would increase the tax on health insurance premiums by 1 percent, double the state’s vehicle excise tax to 6 percent, remove certain GRT taxes on business-to-business transactions, and tax purchases and sales by some nonprofit organizations.
Some of the provisions would take effect in January, Harper was quoted by the Journal as saying, but the overall tax rate wouldn’t be lowered for another 11 months — which would provide a temporary boost in revenue to help balance the state budget for the fiscal year that begins July 1.
The session begins at noon. You can watch live here.