Commentary By Carla J. Sonntag
President and Founder, New Mexico Business Coalition
It’s admirable to see how hard our legislators are working. Whether I agree with them or not, they are focused on moving their agendas.
The question is whether or not those agendas are best for our state.
As the founder of a nonpartisan, statewide, pro-business association, it is disheartening to watch what is happening. We have many elected officials creating laws they say will “be good for the state” and “beneficial to businesses”. Neither could be further from the truth.
With majority control of both chambers and the governor’s office, Democrats have carte blanche. Many in the House have stated they are operating under a mandate to fulfill New Mexicans’ wishes. The Senate, unchanged from the last election, remains tempered.
While the election results for the House were no surprise, it’s dangerous to think there is a mandate. We’ve seen more people actively engaged than ever before on issues like border security and restricted gun rights. Many aren’t happy.
But how much do New Mexican’s know about the attack on good tax policy and business practices?
The governor and many legislators are saying they need a steady source of revenue to alleviate the cyclical nature of the extractive industries. My suggestion would be tax reform and policy that makes our state attractive for businesses while not expanding government beyond our means. But I digress into wishful thinking . . .
People who are in business understand the need to pay taxes for the common good. But there are limits to what they can tolerate before seeking higher ground with fewer taxes. Choices abound as we see Texas, with no income tax, flourish and become a model for other states. North Dakota is currently working on legislation to make that state income tax free as well.
With a budget surplus, many states, including New Mexico under Governor Richardson, gave refunds to tax payers. This session’s House Republican budget provided for refunds, but it was the Democrat’s budget that passed the House, with greatly expanded government and the “need” to fund it.
HB 6 Tax Changes is a comprehensive tax bill that will be painful for all New Mexicans. While some of the tax increases target business owners and the wealthy, numerous other increases hit the average citizen with gasoline, car registration and internet sales tax increases to name a few.
It’s important to note that most business income is taxed at the owners’ personal income tax rate. Increase that rate and you’re impacting jobs which hurt everyone.
There are legislators betting that oil and gas companies won’t leave because of our expansive reserves. These companies have choices about how and where they invest, so while they may not walk away from current operations, they can certainly choose to invest additional resources elsewhere.
We must also consider sound business policy.
Unfortunately, HB 85 Union Security Agreements, is an anti-business measure that thwarts workers’ rights. It states, “an employer or labor organization … may …require membership in a labor organization as a condition of employment”.
Elected officials in ten Counties and the Village of Ruidoso adopted Right to Work ordinances, so that over 655,000 residents had a choice about union membership. This bill takes away that right and allows forcing people – as a condition of employment – to join a union.
Besides HB 6, there are a multitude of other tax bills that increase specific taxes, fees or regulatory costs. And, like HB 85, there is a plethora of attacks on good business practices and our extractive industries, which are the lifeblood of this state.
No one will go unscathed by this legislative session, unless there is an awakening to the need for better tax and business policy. I strongly urge New Mexicans to pay close attention to the final days ending on 3/16/19. Much will happen that can be greatly influenced by constituents expressing their views to legislators. Please get involved or we’ll all be living with the consequences.