Senator Leavell Warns Against Tax Increases in Tough Economic Times
Re-examination of Government Services Needed as Tough times expected to continue

Santa Fe—State Senator Carroll Leavell speaks out against proposals to raise taxes during the 2010 New Mexico Legislative Session and warns that additional tax increases could severely impact New Mexicans. “Now is not the time to raise taxes,” Senator Leavell said at the state capitol today. “Our citizens could face even more problems and hardships if the tax increase bills being proposed were to pass this session.”

Senator Leavell repeats his mantra each day as he serves on the Senate Finance Committee. Much of the important work in this budget session takes place in the Senate Finance Committee where there is lively debate over the budget and how best to fund the demands of education, public safety, highways and other needed services in these times when state revenue is in short supply.

“While Southeast New Mexico is not suffering as seriously as the balance of the state, we have families that are struggling. Many jobs have been lost. Many of our citizens are living paycheck to paycheck and can’t afford increased taxes,” Senator Leavell said. “I remind committee members that state regulations on the oil and gas industry have compounded our slowdown in drilling and production, and that many in the industry are out of work and over-time is something of the past. Additional taxes could be devastating.”

The oil and gas industry is not alone.

In the past year, New Mexico has experienced a 21% decline in personal income tax collections, a 54% decline in corporate income tax collections, and a 20% decline in energy related revenues.

“It does not make any sense to increase taxes on businesses and people when they are down,” Senator Leavell said. “How can you squeeze money out of people and businesses when they do not have it?”

To fund state government for next year, Senator Leavell said the answer to is to curb spending in a state budget that has grown over 40% in the past seven years. “This is an opportune time to reexamine what vital services New Mexico should provide, those that we can afford to provide and those that taxpayers should not have to provide in the first place.”

Senator Leavell said statistics prove New Mexico taxpayers are funding much more state government than taxpayers in other states. “New Mexico ranks 3rd highest in the nation of public employees per capita and has 40% more public employees per capita than the national average when state and local employees, including those in education, are considered, “Senator Leavell said. “If we were at the national average, we could save $200 million dollars a year. We need to examine these numbers.”

New Mexico taxpayers funded a state budget that was as high as $6 billion dollars just two years ago, economists forecast revenues for the coming fiscal year to be at $5.2 billion dollars. “While it is imperative to fund critical services as adequately as possible for next year, there is not enough money to fund non-essential areas. That is not any different than what we do in our homes and businesses,” Senator Leavell said.

Senator Leavell is optimistic the legislature can be successful in managing this downturn in state revenue if there is cooperation and if legislators acknowledge a significant change in state government needs to take place because the serious reality of reduced revenue will be around for years to come.

The budget debate continues at the state capitol as the session nears its midpoint next week.
The 2010 legislative session ends on February 18, 2010.
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