As the normal course of business for the legislature, much is happening in the final days ending Saturday, 3/16/19, at noon. 

 

You’ll get the best update at the BASH on April 4, 2019 with Sen Stuart Ingle.  Don’t miss this great event – register here.

 A few of the latest highlights that could change at any moment:

 HB 6 Tax Changes:

            - Removed Personal Income Tax (PIT) increase. Good news for most businesses and higher income earners, like doctors.

            - Increase vehicle purchase tax to 3.5 percent (formerly in the bill at 4.2 percent)

            - Charge GRT on online sales (as allowed by the 2018 U.S. Supreme Court ruling)

            - Charge GRT to nonprofit hospitals (as is current practice with for profit hospitals)

            - Increased working families tax credit

            - Increased cigarette tax

 SB 437 Raise Minimum Wage and Create Separate One The current state mandated minimum wage is $7.50, 25 cents higher than the federal mandated minimum wage.  Many cities and counties, however, already have mandated wages much higher than that.

 Late last night, there was a conference committee between the Senate and House that produced the following agreement:

                                            Minimum Wage          Tipped Wage

1/1/20 – 12/31/20                 $ 9.00/hour                $2.35/hour

1/1/21 – 12/31/21                 10.50/hour                  2.55/hour    

1/1/22 – 12/31/22                 11.50/hour                  2.80/hour

1/1/23                                    12.00/hour                  3.00/hour

Student wage:  $8.50/hour

No Consumer Price Index (CPI) increases        

SJR 1 PRC Election and Appointment While everyone has concerns about political appointments, voters will decide if regulators in the most powerful state agency remain elected by district or are appointed.

            The Public Regulation Commission (PRC) regulates utilities, the state fire department, some transportation, and others.  It has more power than any other agency as well as the Governor because there really is no balance of power or checks and balances.  Decisions made by the PRC can only be challenged by the case going directly to the NM Supreme Court.

            Riddled with controversy and problems since it was first created, this constitutional amendment that goes to voters would make the current elected five member body a three person appointed commission.  The process for appointment would be similar to judges where a panel would choose qualified candidates who would be appointed by the Governor for staggering terms.

 SB 489 Energy Transition Act The bill has passed both chambers and is expected to be signed by the Governor.  It provides for, among other things, the shut down of San Juan Generating Station and an aggressive new Renewable Portfolio Standard. It also provides for apprenticeship training, a community assistance fund for the Farmington area to transition away from coal mining and the coal fired plant. 

            Currently, New Mexico’s Renewable Portfolio Standard (RPS) requires utility companies to produce 20 percent of its electricity by 2020.  The new standard is:

            By January 1, 2025, 40 percent

            By January 1, 2030, 50 percent

            By January 1, 2040, 80 percent

            By January 1, 2045, zero carbon resources

 HB 356 Cannabis Regulation Act This bill to legalize recreational marijuana hit a wall in the Senate. It would allow purchase of marijuana through state run stores, which was a concept originally established in a Senate bill sponsored by three Republicans.  It was combined with the efforts of Democrats in the House to barely win approval of the full House with a vote of 36-34 vote.  See the voting record here.

            The bill was approved by its first Senate committee, but failed to get a hearing in Senate Finance, where it was likely to fail if debated.

            While some say this would be an economic booster for New Mexico and create jobs, others were concerned about the lack of control standards for such things as operating a vehicle.

HB 8 Background Check for Firearm Sales This highly controversial bill passed both chambers and was signed by the Governor.  Other gun bills are still making their way through the system. 

            This has become a highly charged issue between supporters of the legislation and opponents who are strong supporters of the Second Amendment of the US Constitution which reads:  "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

            This has caused most county commissions and sheriffs throughout the state to declare they are Sanctuary Counties and will not enforce this law.

HB 51 Decriminalize Abortion was defeated on the Senate Floor, 24 to 18.  See the Senate floor vote here.

It’s been a tough session, at times, on business, pocket books and our state constitution.  The debates on these issues have left many wanting a serious policy bill where everyone benefits and no one gets hurt.  We are happy to report we have found it! 
With so many bad bills being rammed through the legislature, the state is at a crossroads.  Will we continue to see a free for all of wills or will the legislators consider what is good for the state, our people and our businesses?

Commentary on proposed legislation that would take more money out of New Mexico's Land Grant Permanent Fund, by NMBC follower David C. Williams, Ph. D.

In considering the wisdom of the proposed increased withdrawal rates from the Permanent Fund, it would be wise to remember that increasing the withdrawal rate from 5% to 6% will reduce the rate of growth (or increase the rate of decline) of the Fund, with the effect on the magnitude of the Fund being cumulative as time passes.  The time will therefore come (which I call the "cross-over time") when a withdrawal of 6% will yield no more than would have a withdrawal of 5% if the rate had been left at that value; after the cross-over time, the fund with a continuing 6% withdrawal would still be yielding less than it would have with a 5% withdrawal if the rate had been left at that value.  If we neglect for the moment the effect of continuing inflows to the Fund from various royalties, a little math shows that the cross-over time is about 18 years (18.23 years, in my simplified model).  After that, the 6% withdrawal rate would be yielding less than would have been yielded by leaving the rate at 5%.

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.

Taking away our rights: The House passed HB 85 Union Security Agreements along party lines with Democrats supporting and Republicans opposing over the weekend. The bill, if signed into law, would stop additional counties from passing Right to Work (RTW) ordinances. It also retroactively takes away the rights of the workers who work in 10 NM counties or the Village of Ruidoso that passed RTW ordinances. Incredibly the bill states in Section 1 B that ‘any employer or labor organization may execute and apply an agreement REQUIRING membership in a labor organization AS A CONDITION OF EMPLOYMENT.’ 

This is a horrible attack on employees’ rights to decide if they will join a union or not. It also takes away a Commission’s right to govern their county with the authority it has always had in employment-related issues such as minimum wage, sick leave, … etc. 
 
Now, about that tax increase.....

Recently the Albuquerque Public Schools (APS) had a $900 million mill levy and bond package defeated.  Voters were clear they love our kids and respect our teachers. They do not, however, feel APS has been a good steward of their tax money. 

We hoped that APS understood that message, but we don’t see evidence they do. 

New Mexico is a state currently dependent on oil and gas production. YES, we are dependent on this industry that provides a minimum of one-third of our state’s budget.  Imagine life without that industry . . . where would we find the money for education and so many other things? 

Fact is, right now, we would be in a world of hurt. If you have doubts, look at this report that the oil and gas industry just released.

With some elected officials who identify as ‘progressive’ attacking that industry at every turn, it begs the question, “What are they thinking?”   While well intentioned to protect our environment and bring in more money for schools, these views translate into big problems for our state that seem to be counterproductive to their desired results.  Want to see how?

The 2019 Legislative Session has been packed with action so far. Here’s a collection of thoughts, information and updates on various topics:

  • The Land Grant Permanent Fund (LGPF): Protection of the LGPF continues to be an NMBC priority and we are grateful to Senators who understand its importance. While many in the House want to make it their bank, we think the Senate will continue to be the adults on that subject and maintain its integrity. Read our latest here and an Albuquerque Journal article here.
  • Bill estimates two months ago vs reality: Several people in both Chambers thought that 5,000 to 8,000 bills could be the magic number this year for introduction. There is enough gusto by some legislators to make that happen, but that has to be coupled with the reality of how many bills the writers (Legislative Council Services) can pump out.
HB 378, The Employee Preference Act, sponsored by Reps ScottGallegosEzzell and House Minority Leader Townsend provides for, among other things, that an employee has the freedom to decide if they will join a union and pay dues – or not. They cannot be required, as a condition of hiring, promotion or continued employment to be a part of a union.

A study by Washington University on minimum wage was very enlightening.  From an employer’s perspective, each $1/hour increase in minimum wage costs the employer approximately $2,600/year per employee.  So if New Mexico’s statewide minimum wage increases from $7.50 to $10, it will cost employers $6,500/year per employee in those brackets.   

There have been lots of attempts to raid the State Land Grant Permanent Fund and that's nothing new.  You can read more about this ongoing issue here and here.

Here are a few important points to consider:

1) The fund was established with New Mexico's statehood to provide for education and a few other beneficiaries, like some hospitals, in perpetuity. That means FOREVER!   It doesn't mean this should be everyone's personal bank account for their every whim. Look at this creative way they'd like to raid the fund here

2) We have increased education spending over $900 million in the past 12 years and our results are still dismal. Is more money the answer? Absolutely not.

All three Albuquerque Public School (APS) ballot questions received a loud NO vote on Election Day. What this means is that property taxes won’t increase and because the existing bond issue was defeated, property taxes should decrease slightly for property owners in the APS school district. 

By now, if you live in the APS area (including Bernalillo County and parts of Sandoval County) you should definitely have received one of these ballots in your mailbox. These must be returned by February 5th. We encourage you to vote, but before you do, consider whether APS needs more of your tax dollars or to better manage the money they get now.  What does NMBC think?

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