Monday, December 13, 2010
Finding $400 Million: It Could Be Right In Front Of Them, Plus: Susana's "Sleepy Pants," And: More On The Movies & Making Them Here
So you say no way can Governor-elect Martinez balance the state budget without violating her promises of no cuts to the public schools, the Medicaid program and not to raise taxes?
Well, don't tell that to ABQ Dem Senator Tim Keller. He's come with a list of tax credits, exemptions and deductions that cost the state treasury over $1 billion a year. It was compiled by the Legislative Finance Committee. If the new Martinez administration is willing to give only some of them a look, she could easily save the state half of the $400 million projected shortfall for the budget year that starts July 1.
Of course, each of these tax breaks, passed over the decades, has their constituencies--including protective lawmakers. Also, many of them benefit the state's energy industry--seen as nearly untouchable because of the backing it gave Martinez's campaign. And you've already heard about the efforts to downsize or eliminate the tax rebate for movie productions. And then there's the hard-fought food tax exemption. That would be difficult to put back on the table.
But there are some esoteric breaks that revenue hungry lawmakers may want to question. For example, what the heck is the "intergovernmental Production Tax Credit against Oil and Gas Taxes?" It cost the state over $2.2 million in 2010. And there's a bunch of others on the list that we bet only a couple of staffers at the Roundhouse even understand.
The complete list of all the tax breaks is here.
If you believe everyone should share in the budget pain--including the energy patch--Keller's list is chock full of potential revenue generators that would raise the cash that could keep the budget shears away from the classroom and the sick beds.
Some will argue that eliminating a tax deduction or credit is tantamount to a tax increase. We haven't heard Martinez say that directly and she would probably be wise not to. She is going to need as many tools in her fiscal toolbox that she can fit.
We now have nearly 20 percent of the state's residents taking part in the federal food stamp program. Only Mississippi, Kentucky and the District of Columbia outrank us.
If you live in the NE Heights of ABQ, wealthy Los Alamos County or the tony East Side of Santa Fe, you might be surprised by that. There has been wealth accumulation here, but like the rest of the nation, much of it has been concentrated at the top of the pyramid.
We have a $400 million budget shortfall, stubbornly high unemployment and entrenched poverty and those who decry the bloggers and frantically call themselves "journalists" are asking about the Governor-elect's pajamas? Might not some questions about how the new chief executive plans on getting the state's house in order be relevant? We've seen honeymoons before, but when the politicians and the press start giving one another orgasms, watch out. Not that we bloggers aren't partial to pajamas.
Oh, yes. We can recite by heart the tiresome comeback from our confounded critics. The blog uses anonymous sources, the blog reports rumors, the blogger gets paid to do PR work, blah, blah, blah. Never mind that the Alligators are accurate 99% of the time, continue to tell truth to power no matter what party holds that power and if there's an agenda around here, we wear it on our sleeve for all to see.
That's the difference.
Meanwhile, this post-election AP interview with Attorney General Gary King doesn't shy away from the questions that linger after Campaign 2010. We didn't find out what kind of "sleepy pants" Gary prefers, but we did get an exploration of his problems.
We're having a spirited dialogue around here on the incentives offered to Hollywood to shoot movies here, including the 25% rebate, There is a lot of interest in this. Today reader Adam Turner comes with a follow-up to an earlier reader post:
The statement "New Mexico spent about $180 million in the last three years to lure Hollywood productions here" is misleading. New Mexico refunded money that was already spent, but didn't spend money up front to lure productions here. It's not free money...
Here are some facts, verifiable with Tax and Revenue. From 2003-2009 the industry spent $893 million dollars here. Of that direct spend, roughly $215 million was refunded. That's $215 million over 7 years, not $180 million over 3. That means $678 million dollars stayed inside the state from 2003-2009 and it's $678 million this state wouldn't have otherwise. Most people seem to spend a lot of time focusing on the refund figure and neglect the more significant direct spend figure.
Another point of clarification is that the rebate program is entirely separate from the investment program, which has not lost a dime because every loan must be guaranteed...Rather than eliminate an industry that now has a thriving infrastructure thanks to these incentives, we should be looking at ways to offer other industries similar tax credits.
Thanks for that, Adam. There is going to be a whale of debate when the Legislature looks at scaling back these incentives next month.
The rebate was actually started under Republican Governor Gary Johnson and put at 15%. Big Bill expanded it to 25%. The point being the incentives have had widespread bipartisan support.
As for adopting similar credits for other industries, don't look for it anytime soon. As we note at the top of today's blog, the state may be looking to tighten up tax credits as it seeks revenue to balance the budget. That's another reason the movie incentives are under pressure.
Steve Pearce will be in the majority in the US House and Dems Martin Heinrich and Ben Ray Lujan will be in the minority. It's going to be tough for the two Dems, but Republican Steve of the southern congressional seat is off and running. He's lined up a coveted spot on the House Financial Services Committee, a slot not normally taken by new members.
Pearce previously served on the committee when he did a six year run in the House and that seniority carried over helping him to get the assignment. There was earlier speculation that Pearce might be in line for a commerce committee position.
There is a streak of populism to Pearce, borne in the rough and tumble oil fields of the southeast. In 2008, he cast a vote against the $700 billion Wall Street bailout while then ABQ Congresswoman Heather Wilson voted for it. But we didn't hear much from Pearce in the recent campaign about the "little people" versus the big bankers and Wall Street interests.
We don't know how much direct impact the financial panel will have on the state, but we do know Pearce is now the state's only direct connection to the new GOP House leadership. In that role he will be expected to step up his involvement in the federal and military installations here, something that he was not known for in his first six years.
THE BOTTOM LINES
What exactly is a "political operative?" Retired ABQ Journal columnist Jim Belshaw has today's bottom lines:
Is there a more loaded political word than "operative?" What exactly is an "operative?" How do you get to be one? What do they do? Do they wear trench coats and aviator sunglasses to work? Do "operatives" openly discuss their work lives at family holiday dinners?
Back in the mists of time when I wrote columns, I wrote one in which I longed to be an "aide." That "e" at the end of the word seemed particularly attractive.
Of course, even better than being an "aide" would be to have an "aide." But I could never find out how to get one.
We agree with Jim that trench coats and aviator sunglasses are the preferred attire for those identifying themselves as operatives. Since there are potential female "operatives" who might be concerned about the appropriate fashion code, we've posted a photo of the proper trench coat to wear before embarking on their operative duties.
And by the way, Jim, a white trench coat is permissible for Santa Fe operatives, but only in the summer months.
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