"We can’t afford to lose more jobs by raising taxes" state land commissioner candidate Bob Cornelius says.
As our State Legislature convenes in Santa Fe, many legislators have offered several proposals to raise revenue for our budget deficit by raising taxes on the poor by increasing taxes on food. We’ve also seen proposals to tax the “rich” by raising income taxes. There’s even talk of raising our gross receipts tax on business. I am amazed that our elected officials would even consider raising taxes during a time of recession in our state.
What the Richardson-Denish administration and the Democrat led State Legislature fail to see is that higher taxes won’t create more revenue, it will create less. If they raise the tax on food, people will shop less and go hungry more often. If they raise income taxes, people will move out of the state and look for a new job. If they raise the gross receipts tax, businesses will have to find ways to make up the financial hit and that usually means they will layoff some employees or take their company and their jobs to a state that is more business-friendly. According to a report from the NM Department of Workforce Solutions, New Mexico lost over 43,000 jobs in 2009. We can’t afford to lose more jobs by raising taxes.
The easiest way to raise revenue is to create jobs. More jobs mean more people paying income taxes, buying more food, and more businesses doing more work which increases the state’s revenue from the gross receipts tax. The most likely place for new jobs to be created is in the area of energy, both traditional forms like oil and natural gas and by creating a new energy economy to include wind, solar, clean coal, biogas, hydro and eventually nuclear.
Unfortunately for New Mexico, the same Legislature that wants to raise your taxes, has also created over-burdensome regulations on energy that have attributed to the 43,000 jobs lost and will continue to cause more people to lose their job if steps are not taken to ratify the situation.
Revise the Pit Rule instead of raising taxes
Instead of raising your taxes, the State Legislature needs to take a look at revising the “pit rule” policy created by the Oil Conservation Division. This policy is not law, but it has effectively killed thousands of jobs in the oil, natural gas, and mining industries. This rule adds an additional $150,000-$250,000 to the price of every well a company drills, depending on which part of the state the company drills. If we eased the regulation, a company could spend that $250,000 to create eight jobs that pay over $15 an hour. That was just for drilling one well. Ideally, these companies could hire more people and do more energy exploration. The company would pay more gross receipts taxes, the new employees would pay income taxes and could afford to buy more food for their families. The tax revenue created would help the budget crisis and with oil and natural gas prices recovering, a percentage of the revenue from the minerals would go into the Land Grant Permanent Fund which funds Pre-K through 12th grade education and our colleges in New Mexico.
Along with the revised regulations, I am proposing that the State Land Commissioner work with climatologists and geologists to locate ideal areas for the creation of “green job zones”. These studies would allow us to target areas of state land where renewables like solar and wind could produce the most energy. With the proposed Tres Amigas power plant outside of Clovis connecting major electrical grids and the Legislature’s mandate that local utility companies use 20% renewable energy to create electricity, there is an already made market demand for renewable energy businesses to come in, create thousands of jobs and produce billions of dollars of new revenue for this state.
This could all be accomplished in this 30 day session of the State Legislature. Instead of arguing over which taxes to raise and on whom taxes will be raised, the Legislature could be working to foster a climate for job growth and real revenue enhancements. We can solve this budget crisis by being proactive and taking a new way forward, instead of trying the old failed policies of the past.
The plan is simple: More Energy, More Jobs, More Revenue.