Apparently, New Mexico Won’t be More Transparent

2018-04-03T12:39:48+00:00 Blog Posts, Tax and Budget Blog|

So what happened with all that transparency and accountability the new Governor was touting during the campaign?

The Legislature stepped up and passed numerous bills that would improve transparency and accountability in state government and the only one she signed required more oversight for the burgeoning film industry. All of the measures that would have provided more oversight within state government were vetoed. The Governor missed a major opportunity to set out a vision for a new era of openness.

SB 187 (Sen. Tim Keller, D-Albuquerque) , a bipartisan bill to require the administration to create an office of accountability so that lawmakers could have access to information they need to evaluate the effectiveness of the money they are appropriating, passed unanimously in both houses. Governor Martinez, like Governor Richardson before her, vetoed the bill. This means lawmakers will have less information to make important budgetary decisions.

SB 17 (Sen. Keller), a bipartisan bill to remove the governor from the State Investment Council, passed with overwhelming support in both the House and Senate. The action in this bill was the number one recommendation of the Ennis Knupp research study completed in 2010, and yet the Governor vetoed it.

And of special interest to NM Voices were SB 47 (Sen. Keller) and HB 161 (Rep. Eleanor Chavez, D-Albuquerque), two similar bills that would have created a tax expenditure budget. Both bills passed with overwhelming bipartisan support and both were vetoed. Several years ago, NM Voices worked with then-State Representative Brian Moore, now the Governor’s Deputy Chief of Staff, to unanimously pass a tax expenditure budget. Governor Richardson vetoed that bill.

A tax expenditure budget is important because it details the cost of the many tax breaks the Legislature has passed over the years. Currently, New Mexico gives away almost as much in tax breaks as it collects in tax revenues. The holes in the Swiss cheese are almost as big as the cheese itself—and this year, despite the continuing budget shortfall, more holes were carved out.

Every year the Legislature passes a spending budget and lawmakers fight over every dollar. But if a lawmaker passes a tax break bill, it is almost never debated again. That money is indirectly ‘spent’—not collected—every year. And what’s worse, the exact amount of money the state foregoes because of that tax break is never counted.  So a lawmaker might pass a tax law that is estimated to cost $5 million, but if the tax break turns out to cost the state $10 or $20 million, no one ever knows. That would never happen in the general fund budget. If $5 million is appropriated for a program, that’s all there is for it and no more. Not on the tax side of the budget. With the exception of the newly trimmed back film tax rebate, tax breaks have no limits, little transparency, and no accounting. We’re one of just a few states that does not track how much we’re ‘spending’ on tax breaks. Even the federal government tracks tax breaks. The tax expenditure budget would have detailed that and provided lawmakers with an essential budgeting tool they don’t currently have.

Economic developers were also disappointed that it was vetoed. They wanted a tax expenditure budget so they could show prospective companies what tax breaks were available and show lawmakers which ones worked to create jobs and which ones needed improvement or repeal. All this transparency would have allowed us to ‘spend’ our tax breaks more wisely.

But alas, like Rep. Moore’s bill before them, the two tax expenditure bills were vetoed. In Governor Richardson’s veto message he vowed to create a tax expenditure budget by Executive Order. It never happened. This year, the Legislature tried again with a governor who campaigned on greater transparency and accountability. In her veto message, Governor Martinez said that she will “conduct a thorough review of all tax credits. I believe that this is best achieved by directing the Taxation and Revenue Department to compile all expenditure information. This is something I will direct the department to do through an executive order.”

Feels like déjà vu all over again.

Bill Jordan is NM Voices for Children’s Policy Director