By Fred Nathan

The best state sales tax systems (or gross receipts tax, as it is called in New Mexico) are broad, low, and don't tax necessities, like food.

If tax systems are broad and low, that means that the tax burden is shared widely by different products and services and doesn't fall too heavily on any one product or service. Meanwhile most states avoid taxing necessities so that citizens who live paycheck to paycheck are not forced to choose between paying the rent and putting food on the table.

Unfortunately, New Mexico's gross receipts tax (GRT) is neither broad nor low. At last count, there were 338 exemptions for everything from boxing matches to all-terrain vehicles, and these exemptions significantly narrow the tax base. The GRT also averages more than 7.25 percent across New Mexico, which is relatively high, according to the Tax Foundation.

The one area where New Mexico's GRT gets it right is the fact that, since 2005, New Mexico no longer taxes food or medical services. This was an important reform, since the food tax not only fell on a necessity, it was also very regressive in that it fell hardest on those who could least afford it.

Unfortunately, Bill Fulginiti, the Executive Director of the New Mexico Municipal League, representing all the mayors and city councilors of New Mexico, is proposing to "fix" the food tax, the one thing about New Mexico's GRT that is not broken, by re-imposing it!

New Mexico was the second state to tax food in 1933 during the heart of the Great Depression. (Mississippi was the first.) It was enacted as a "temporary" and "emergency" tax but it hung around for more than seven decades and more than tripled in most places in the state during that period.

When it was finally repealed, the Legislature enacted a "hold harmless" provision to compensate the cities for their lost share of the tax on food. However, in 2013, the legislature phased out the hold harmless payments over a 15-year period and in return gave cities the ability to raise their (non-food) taxes by three-eighths of one percent.

Although Fulginiti clearly has concerns about this change, he never explains why the solution isn't simply to restore the hold harmless payments instead of re-imposing the food tax.

Instead Fulginiti focuses on the impact the food tax would have on low-income New Mexicans. Surprisingly, he claims that the repeal of the food tax "did nothing to help low income New Mexicans" because he argues that they purchase all their groceries with food stamps. That, of course, is simply not true.

Fulginiti relies on the common misperception that food stamps cover the full cost of a low-income family's food needs. Actually, the purpose of the Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is to supplement a family's food budget, not replace it.

The average New Mexican using food stamps receives about $4.09 a day, or about $1.36 per meal, according to a recent analysis by the Legislative Finance Committee.

That is why the federal food stamp benefit formula assumes that families will spend an additional 30 percent of their net income on food in order to afford an adequate diet. As a result, every family receiving food stamps still pays for a large portion of their groceries out of pocket and they benefit from the Legislature's decision to repeal the food tax.

In addition, about 33 percent of families who qualify for food stamps are not enrolled, according to the New Mexico Human Services Department. They constitute more than 130,000 low-income New Mexicans, including tens of thousands of children, who would be paying tax on all of their groceries if the food tax were re-imposed.

Fulginiti also neglects to explain why it makes sense to tax working, middle-class New Mexicans on their purchases of fruits, vegetables and baby food.

Thankfully, not every mayor and city councilor agrees with the Municipal League on the food tax. For example, Santa Fe Mayor Javier Gonzales and the Los Alamos Council have both recently gone on record opposing the re-imposition of the food tax.

Please call your Mayor and city councilor and ask them to go on record opposing the re-imposition of the food tax. Please also visit www.thinknewmexico.org to learn more and go to our Action Center where you can contact your legislators and ask them to also oppose the food tax.

Fred Nathan is Executive Director of Think New Mexico, an independent, statewide, results-oriented think tank which led the effort to repeal the food tax in 2005.