Santa Fe- It is up to the Senate to try and save the day, or at least save taxpayers from having to spend even more of their hard earned money on rescuing the state from the budget mess it is in. The State Senate now has control over the budget process and the proposed tax increases the House passed Friday. At least one State Senator says the Senate needs to make major changes to the House’s proposals that would increase taxes over $300 million and reduce spending with negligible cuts to balance the state’s budget for fiscal year 2011 which begins July 1st.
“As it stands now, the House’s solution is to tax ourselves out of the budget crisis rather than reduce state spending to balance the books,” State Senator Sue Wilson Beffort said. “We need to find a long term solution, not a short term fix. Our most recent economic forecasts predict that New Mexico will not be coming out of this recession anytime soon. We must be disciplined and live within our means.”
Senator Wilson Beffort who serves on the Senate Finance committee said Senate Finance will take up the House budget and House tax increase bills Monday. She anticipates numerous amendments will be proposed to reduce state spending and to eliminate or reduce the need for tax increases proposed by the House. “I hope the State Senate stands firm in its resolve to reexamine the role of state government and how much our taxpayers truly should be funding,” Senator Wilson Beffort said. “This is the opportunity to do it. I have faith that our Senate will once again stand up against the Houses proposed tax increases. We have done it in the past, we can do it again this session.”
Today, the full Senate received the most up to date information that revenue projections for the new year that begins July 1, 2010 are not expected to improve and received information on how the Houses’ budget will impact the state.
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“This is not the time to raise taxes, not when our business are hurting and our residents are losing their jobs,” Senator Wilson Beffort said. “How can the state further squeeze money out of those who don’t have it. We have to take a serious look at reducing the size of state government so our residents can afford it.”
The House budget totals $5.6 billion worth of spending while the state revenues add up to only $5.1 billion. To make the difference, the House proposes two main tax increases.
The proposed HB119 would temporarily increase the state’s gross receipts tax base to 5.5% from 5% starting July. That hefty increase would generate an estimated $240 million to the state’s coffers when people make purchases in the state.
“One way to get out of these economic tough times is to encourage people to begin spending money again so our businesses can once again thrive, and begin to hire back the people who have lost their jobs. We should not be discouraging spending by taxing folks on their purchases,” Senator Wilson Beffort said.
HB9 would expect to raise $66 million by placing an additional 1.5% personal income surtax on income over $133,000 for single New Mexican taxpayers and the tax would be applied to income over $100,000 for two years on married couples filing separately and to income over $200,000 for those filing jointly.
“This income surtax will greatly affect our small businesses that pay a substantial percentage of our taxes. That is what is not being discussed,” Wilson Beffort said. “Small businesses make up the banner share of New Mexico businesses. If their taxes are raised, they will not be able to hire back the people that had to be laid off.”
After an amended House budget passes the Senate, it must return to the House for concurrence. If there is no agreement, it goes to a conference committee where differences between the two versions of the budget bill are attempted to be worked out. Then the conference committee report needs to be agreed to by both Houses.
While the legislature has cut spending by about $700 million in the past two years, spending on state government had increased more than $2 billion in the previous six years.
“As it stands now, the House’s solution is to tax ourselves out of the budget crisis rather than reduce state spending to balance the books,” State Senator Sue Wilson Beffort said. “We need to find a long term solution, not a short term fix. Our most recent economic forecasts predict that New Mexico will not be coming out of this recession anytime soon. We must be disciplined and live within our means.”
Senator Wilson Beffort who serves on the Senate Finance committee said Senate Finance will take up the House budget and House tax increase bills Monday. She anticipates numerous amendments will be proposed to reduce state spending and to eliminate or reduce the need for tax increases proposed by the House. “I hope the State Senate stands firm in its resolve to reexamine the role of state government and how much our taxpayers truly should be funding,” Senator Wilson Beffort said. “This is the opportunity to do it. I have faith that our Senate will once again stand up against the Houses proposed tax increases. We have done it in the past, we can do it again this session.”
Today, the full Senate received the most up to date information that revenue projections for the new year that begins July 1, 2010 are not expected to improve and received information on how the Houses’ budget will impact the state.
more-
“This is not the time to raise taxes, not when our business are hurting and our residents are losing their jobs,” Senator Wilson Beffort said. “How can the state further squeeze money out of those who don’t have it. We have to take a serious look at reducing the size of state government so our residents can afford it.”
The House budget totals $5.6 billion worth of spending while the state revenues add up to only $5.1 billion. To make the difference, the House proposes two main tax increases.
The proposed HB119 would temporarily increase the state’s gross receipts tax base to 5.5% from 5% starting July. That hefty increase would generate an estimated $240 million to the state’s coffers when people make purchases in the state.
“One way to get out of these economic tough times is to encourage people to begin spending money again so our businesses can once again thrive, and begin to hire back the people who have lost their jobs. We should not be discouraging spending by taxing folks on their purchases,” Senator Wilson Beffort said.
HB9 would expect to raise $66 million by placing an additional 1.5% personal income surtax on income over $133,000 for single New Mexican taxpayers and the tax would be applied to income over $100,000 for two years on married couples filing separately and to income over $200,000 for those filing jointly.
“This income surtax will greatly affect our small businesses that pay a substantial percentage of our taxes. That is what is not being discussed,” Wilson Beffort said. “Small businesses make up the banner share of New Mexico businesses. If their taxes are raised, they will not be able to hire back the people that had to be laid off.”
After an amended House budget passes the Senate, it must return to the House for concurrence. If there is no agreement, it goes to a conference committee where differences between the two versions of the budget bill are attempted to be worked out. Then the conference committee report needs to be agreed to by both Houses.
While the legislature has cut spending by about $700 million in the past two years, spending on state government had increased more than $2 billion in the previous six years.
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