Photo by: Luis Sanchez-Saturno/The New MexicanAlthough he's campaigned both for president and governor as a tax-cutting Democrat, Gov. Bill Richardson told reporters Monday that tax increases are "inevitable" during the next legislative session because of the budget crisis. "It's very painful," Richardson said. He said he'll soon be appointing a committee to study the best ways to raise revenue. Richardson declined to say which tax hikes might be approved in the Legislature. "Nobody likes them, but we're going to have to have them," he said. If it's true that tax increases might be seriously considered next year, it would be the first time in at least 15 years that raising taxes has been seriously discussed in New Mexico.
When Richardson took office in 2003, cutting personal income taxes and capital gains taxes were among Richardson's chief priorities. He said these actions would help attract high-paying jobs to the state. And in the eight years prior to Richardson, his predecessor, Gary Johnson, made low taxes and small government his hallmark. In the days leading up to the recent special session, Richardson made it clear he would oppose any move to repeal his tax cuts — as unions, the New Mexico Conference of Catholic Bishops and various other advocacy groups are calling for. During the special session, several liberal Democrats complained that Richardson had "tied our hands" by his proclamation that said lawmakers couldn't consider tax increases. "Where was he during the special session?" was the response of one Democratic lawmaker when told about Richardson's statement that tax increases are inevitable.
Richardson at the news conference acknowledged such criticism. Referring to meetings before the session, Richardson said, "I sat here with legislative leaders, and they all agreed we wouldn't have any tax increases this session. Because if we're gonna have (tax increases), we're going to do it in a methodical, practical, positive way." He said there will be more time to study taxes before the regular 30-day session that begins Jan. 19. Terri Cole, executive director of the Albuquerque Chamber of Commerce, who attended the news conference, thanked the governor for "prohibiting tax increases" during the special session. Richardson will find no lack of sponsors next year for tax increase ideas.
State Rep. Brian Egolf, D-Santa Fe, who during the recent special session introduced measures to raise taxes on alcohol and tobacco as well as the motor vehicle excise tax, said he'll carry similar measures again in 2010. Egolf said he expects public support for the increases, in the face of the state's budget crisis. "These taxes have broad public support as a means to provide the revenue we need to fund our children's education. The taxes on cigarettes will have the added benefit of reducing teen smoking and reducing smoking-related deaths in the future," Egolf said. Increasing the state tax on cigarettes by $1 a pack would generate almost $33 million a year for the general fund, while increasing the cost of alcohol by a dime a drink would bring in about $66 million annually. Raising the motor-vehicle excise tax by 1 percentage point could generate almost $70 million a year.