Public opinion polls have long shown that average Americans are tired of big corporations getting away with paying little or no income tax on their mega profits. Now, from a surprising source, comes a new poll showing overwhelming distaste with the corporate exploitation of tax loopholes. The surprising source of this malcontent is the small business sector. It’s surprising because the little guys usually throw their lot in with the corporate guys, figuring what’s best for the big box is what’s best for them. Apparently, they’re starting to see things differently.

A whopping 90 percent of the small business owners surveyed nationally said that large corporations use loopholes to avoid paying taxes that the small businesses pay. They also view this as a problem, saying it harms their business.

When it comes to corporate tax loopholes, New Mexico has a doozy. What’s more, New Mexico is the only state in the western U.S. that allows multi-state corporations to have this particular advantage over its home-grown businesses. And that is shameful.

Multi-state corporations use the loophole to shelter their New Mexico profits in a state that does not collect corporate income tax (Delaware is the big favorite). Then when they file their New Mexico tax returns they can claim they simply didn’t make much here in the Land of Enchantment. Meanwhile, companies that do business only in New Mexico (hint: collectively, they are the largest employer in the state) are paying taxes on their profits.

Attempts have been made over the last several legislative sessions to close this unfair loophole—in fact Senator Peter Wirth (D-Santa Fe) has introduced such legislation (SB-9) again this year even though Governor Martinez has threatened to veto it. The Governor has said she doesn’t support closing this loophole because she doesn’t want to “pick winners and losers.” The existence of the loophole itself picks winners and losers and, sadly, the winners here are not New Mexico’s small businesses.

To be fair, Governor Richardson wasn’t supportive of closing this loophole either. Legislation to fix it has always met extreme resistance at the Roundhouse—namely in the form of corporate lobbyists who are looking out for their client’s best interests and throwing expensive parties for your lawmakers. While the executive and legislative branches have been failing us, though, the courts have been doing their job.

New Mexico’s Taxation and Revenue Department has taken a number of these corporate loophole-exploiters to court—most famously Wal-Mart—and won judgments against them. And the giants have paid up. So what’s the problem, you ask? The problem is, this is an expensive, inefficient, and time-consuming way to collect the income taxes that are rightly due to the state in the first place. And the folks at the TRD and in the courts certainly have better things to do than clean up a mess the Legislature and Governor refuse to touch.

Don’t laugh this off as some moral “fairness” issue—although it is. It’s also a very practical issue. All businesses need certain infrastructure and services in order to operate. They need roadways, an educated workforce, police and fire protection, and a court system to enforce their contracts. Since they all need this infrastructure, they should all pay for it. New Mexico’s small businesses are already at a disadvantage when it comes to competing with big corporations. They lack the buying power to get the best prices on everything from raw materials to health insurance. This loophole puts them at a further disadvantage. While they’re chipping in to keep the roads paved and the first responders at the ready, the big guys are getting a free ride. If that’s not an example of “winners and losers” then what is?

Alicia Manzano is NM Voices’ Outreach Director

Each month, the Human Services Department posts figures showing the number of people in different categories enrolled in Medicaid (with a four-month lag). They just released the numbers for October 2011, broken down by adults and children and by various categories. The reports are available here. Once again, children’s enrollment was down to 336,436. This is about the same as October 2010 (336,034), even though the number of New Mexico children has grown almost 2 percent over the year.

Here is a graph that shows children’s enrollment in New Mexico Medicaid from late 2006 through the present, and then projected (by HSD) through 2013. From 2007 to 2010, enrollment grew at almost 7 percent per year, partly because of the recession but also because HSD was reaching out to families to enroll their kids. 

The graph shows that enrollment has gone absolutely flat since the summer of 2010. The graph also shows that HSD is continuing to project very low enrollment growth into the future—about 1 percent per year.

In November 2009, HSD gave a list to the Legislative Finance Committee of various “cost containment” measures they had undertaken to reduce costs in the Medicaid program.  One of the entries was “limit outreach/aggressive recertification.” Medicaid Director Julie Weinberg was quite candid in telling the Legislature and other public audiences that HSD had essentially ceased any special outreach to enroll children because the budget wouldn’t permit significant new enrollment. The results of that slow-down (together with a little improvement in the economy) are shown above.

At last year’s Legislative session, the Legislature and Governor were truly facing a potential crisis in the Medicaid program because the federal stimulus funds were set to expire (and did) on June 30, 2011. They came up with some $300 million in new state funding to fill that gap, and NM Voices for Children publicly thanked them on stepping up to the plate.

But now that this challenge has been met, there is no excuse to continue the slow-down in kids’ enrollment. There are still an estimated 50,000 New Mexico children who are eligible but not enrolled in Medicaid. Many of them are Native Americans and/or located in rural areas. We urge HSD to begin once again to focus with providers and advocates on how we can step up the enrollment of our children in Medicaid.

Children have a broad and unique range of health care needs, which is well-covered by Medicaid. It provides child preventive services, including immunizations and developmental screenings.  Appropriate health care can help children avoid preventable and serious chronic conditions like obesity, heart disease, and Type II diabetes, and promote adequate nutrition and physical activity. Vision, hearing, and dental care—often considered “extras” in health coverage for adults—are among the services children need in order to develop and achieve their full potential. These are services that lower-income kids can get if they are enrolled in Medicaid. If they are not, these kids will mostly do without, and their education will suffer along with their health. Please, let’s get these kids enrolled!

Nick Estes is NM Voices’ Deputy Policy Director

Taxes matter. Despite the beating they get in public discourse, taxes are not bad. They are not to ‘blame’ for any number of evils. They are simply a tool. Taxes are the pooling of our resources in order to accomplish things collectively that few of us could accomplish on our own. Taxes are how we build roads, educate kids, maintain law and order, and provide a whole host of other services and infrastructure few of us would be willing to live without. Taxes are our investment in our quality of life. But the way they are talked about, you would think taxes are a proxy for something sinister.

Taxes are a proxy—for something necessary, not something bad.

Imagine how we would sound if we used words like ‘roads,’ ‘education,’ ‘public safety,’ and ‘heath care’ instead of ‘taxes.’

Would you want to be heard saying, “I can’t believe I pay for roads when I fill my gas tank”? Or, “first responders really hike up the cost of my mortgage.” Or, “my water bill wouldn’t be so bad if I could get out of paying for public safety.” It might make us sound stupid or shallow but we would, at least, be speaking more honestly about taxes than we do now.

Taxes are a big topic of discussion at the Roundhouse these days, thanks to a couple of recent studies that rank the states on their various tax rates. New Mexico’s taxes are either too high or too low, depending on which study you favor. But imagine how the conversations might sound if legislators used the same technique cited above when talking about taxes.

You might hear, “our network of roads and traffic signals is a burden to new businesses.” Or, “companies don’t relocate here because we educate our populace.” Or, “we’re never going to recruit new business until we cut back on our court system.”

The point of this exercise is that when we talk about taxes we’re generally taking about the wrong issue. What we should really be talking about is what we want to accomplish as a community. What kind of state we want to live in. Do we want to live in a state where 25 percent of children lived in poverty before the recession? Are we OK with only providing pre-kindergarten to 15 percent of our 4-year-olds? Can we ignore the fact that tens of thousands of our children can’t see a doctor for routine health care?

You’d be hard pressed to find a legislator on either side of the aisle who would answer yes to these questions. But you would find some that want to cut our tax rates even though such a move would only sap our ability to solve these problems.

Taxes matter. It matters how much money the state collects and from whom it is collected. But what matters most is why we collect them in the first place. Roads. Education. Public safety. Health care. These are not partisan issues. Most of us agree that we want these things—not just for ourselves but for our families, our neighbors, and the generations that will follow us. Maybe if we spent more time talking about why we collect taxes, we would agree more on how much we should collect and from whom.

Bill Jordan in NM Voices’ Policy Director

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Within weeks of taking office, Governor Susana Martinez called for a “substantial redesign” of New Mexico’s Medicaid program—the health insurance that covers one in four New Mexicans, about two-thirds of whom are children. She has repeatedly said that the program is financially unsustainable, even though a couple of studies conducted by New Mexico Voices for Children have shown that just the opposite is true—that the program is an economic engine for our state and will more than pay for itself through 2020 as federal health care reform continues to come online. (One report is about the economic benefits of the Medicaid expansion under federal health reform and the other is about the tax revenue benefits from that same reform.)

The consultants hired by the state to recommend changes to the program have completed their assessment of the redesign and have made their report to the governor. Any day now she will decide which of the recommendations she’ll implement. No doubt, some administrative changes will be welcomed by everyone. However, most advocates for health care for kids fear the governor may also elect to implement “cost sharing” that would likely result in low-income children losing access to their health care.

Two governors named Scott are proposing changes to their states’ Medicaid program that will be devastating for their kids. Governor Rick Scott is proposing a plan for Florida that could result in 800,000 people, most of them children, losing their health care. In Wisconsin, Governor Scott Walker (who faces a recall election for implementing other unpopular policy changes) is calling for a plan that could result in 64,000 losing their health care coverage. 

Let’s not go where the Scotts have gone! New Mexico can and should do better.

Bill Jordan is NM Voices’ Policy Director

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At a time when workers’ rights and even child labor laws are under attack, it is encouraging to see a significant and hard-won victory for farm workers in New Mexico. Just before the holidays, Second District Judge Valerie Huling ruled that farm and ranch workers in New Mexico are entitled to be covered by workers’ compensation benefits. The New Mexico Center on Law and Poverty brought the lawsuit on behalf of workers who were injured on the job. At question was the constitutionality of a state law that denies workers’ compensation benefits to farm and ranch workers. New Mexico Voices for Children had long supported amending the law to allow them to get coverage, but legislation to do so repeatedly failed in the Legislature.

Congratulations and gratitude goes out to our friends at the Center on Law and Poverty for representing the workers and winning the case. Our thanks also go out to the injured workers who were courageous enough to bring the lawsuit on behalf of the 10,000 agricultural workers who will now benefit directly from workers’ compensation benefits. It’s a good time to remember that when more of us are protected, all of us benefit from a safer and more just society.

Bill Jordan is NM Voices’ Policy Director

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The shopping malls are filled with holiday spirit, colorful displays, and high-tech gadgets like the latest cell phones and video games.  It’s true that kids love these kinds of things for Christmas. But, as we lighten our wallets to acquire these gifts, we might want to pause for a moment and ask, “Is this the best way we can show not just our own children—but all children—that we love and care for them?” For children who are homeless and extremely vulnerable during this general time of cheer, there are things we can do to have a more lasting, positive effect.

The number of children experiencing homelessness in New Mexico is growing fast.  We have 16,260 homeless children—that’s enough kids to fill The Pit, UNM’s basketball arena. These children are often hungry, frequently sick, and always fearful of what each new day may bring. They never know how long they’ll stay in one place and many of them suffer from post-traumatic stress disorder or other emotional problems. They live in a world basically invisible to most of us. They have no power and no voice to be heard by the policy-makers who could help. 

The current recession—accompanied by long-term unemployment, and stunning numbers of housing foreclosures and personal bankruptcy rates—has led to an increase in child and family homelessness. Up to six million families in the U.S., many of them middle- and low-income and minority families, have lost their homes due to foreclosure, and about double that number may lose their homes before the economy regains its balance. In New Mexico, the number of homeless children has more than doubled since 2007 when the recession began, yet we have no state planning effort focused on addressing this immense and growing problem.

Christmas for these children will be anything but magical. Even the massive and generous charitable contributions, the donated toys and gifts caring people provide, will probably only last through the holiday season. Then it’s back to life as usual for these kids.

As a new parent, I know that what my child needs from me—not just this Christmas, but long-term—is my presence, love, and care. He also needs a sense of security and safety much more than the high-ticket gifts of the season. This is also what homeless children in our state need, and though I cannot give that to them directly, I can stand and be a voice for them with those who make the policy decisions that can impact their young lives for better or worse.

What all children in New Mexico really need this Christmas—and year round—is for policy makers to address issues central to their health, education, and their families’ economic well-being. These are powerful issues and our action (or inaction) on them today will affect every child’s future and ability to attain the American dream. Parents can also be powerful advocates and need to ask our state’s policy-makers to improve the lives of these children and their families—to save families from foreclosure and children from homelessness, to keep food on their tables, and ensure they have access to health care and the early care and education opportunities that will set them on the path to a solid and successful future.  As a parent, I hope to see more parents using their voices to speak for children in the new year—giving a more enduring and valuable gift for all our children. 

For more information on how you can get involved in ending child homelessness, visit the New Mexico Coalition to End Homelessness,  check out the Campaign to End Child Homelessness—a program of the National Center on Family Homelessness (or go directly to the New Mexico Campaign page)—or contact direct service providers like Cuidando los Niños. You can also make a donation to New Mexico Voices for Children to support our work to improve the economic security of New Mexico’s most vulnerable families and kids.

Kwaku Sraha is NM Voices’ Finance Manager.
Chris Hollis, NM Voices’ KIDS COUNT Director, also contributed to this post.

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Federal health care reform (the Patient Protection and Affordable Care Act of 2009, or ACA) will provide health insurance to an estimated 315,000 previously uninsured New Mexicans. In doing so, it will bring billions of new federal dollars into our state’s economy, creating many new jobs, and generating over $1 billion in new state and local tax revenue by 2020.

Beginning in 2014, Medicaid will expand to cover almost all low-income New Mexicans under age 65. The New Mexico Human Services Department projects that by 2020 New Mexico will have added between 133,000 and 183,000 new Medicaid enrollees. These will primarily be adults who were previously unable to afford health insurance. Also beginning in 2014, the state will have a new health insurance exchange where individuals who earn too much to be eligible for the new Medicaid coverage will be able to purchase private insurance. They will receive sliding-scale federal financial assistance to help pay for their insurance.

The new federal dollars flowing to New Mexico health care providers will generate billions more in economic activity, creating tens of thousands of new jobs and raising about $1billion in new state tax revenue—far more than the state’s share of the cost of implementing ACA. The more aggressive the state is in expanding health care to uninsured New Mexicans, the greater the health and economic benefits to the state.

The table below is a summary of the estimated economic effects of implementing PPACA in the state of New Mexico during the first seven years (2014-2020). As the table shows, the new state tax revenue created by all of this new economic activity will more than pay for the new spending required by the state for Medicaid expansion.

These data are set forth in greater detail in two reports by New Mexico Voices for Children released in August of 2011: The Economic Benefits of Health Care Reform in New Mexico and The Tax Revenue Benefits of Health Care Reform in New Mexico.

Covering so many more people with health insurance will have tremendous benefits, not only in terms of better medical outcomes and quality of life but for our state’s economy. New Mexico has a very high rate of residents without health insurance, and that means our health care providers have a great deal of uncompensated medical costs. Much of this cost is shifted to those who do have private insurance—adding $2,300 to the average New Mexico family’s health insurance premium every year. New Mexico has the highest cost shifting in the country.

Our high cost shifting is an effective economic development disincentive for the Land of Enchantment. Who is going to want to create high-wage jobs here knowing that their health insurance costs will be on an unsustainable upward trajectory? The ACA is the only thing on the horizon that will help with this, by getting most New Mexicans insured so their health care costs aren’t passed along to businesses that provide health insurance.

New Mexico was just awarded a $34 million federal grant to establish the state health insurance exchange. This is a great step forward, and we hope the state will aggressively implement health care reform to really benefit our state’s health and economy. 

Nick Estes is NM Voices’ Deputy Policy Director

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Have you ever wondered what our children will think about what we did today when it’s become a part of history?  When they’re old enough to understand what’s going on today, whether it’s 15, 20, or 25 years from now, what are they going to think about our today?  Right now. 

Decisions that our leaders make today will affect today’s babies now and when they become the young adults of tomorrow, yet it seems that the only comments ever made about the future are simply political rhetoric.  “We have to cut government spending and bring down the deficit so our children don’t assume our debt.”  This makes sense when you listen to the words, but what’s the real message?  That making smart investments today to ensure a strong future is not a good strategy? I’m all for protecting future generations from assuming debts that they didn’t incur, but hasn’t every generation faced the same issue?  At what cost do we only think about cutting expenses and not increasing revenue?  Ask any business owner—minimizing expenses is always good, but increasing your revenues is much better!

I keep hearing that our public education system needs to be “overhauled” and we need to “stop throwing money at the problem.”  But I’ve yet to hear what this “overhaul” consists of.  Do we stop funding education altogether and produce a generation of the educated “haves” and the undereducated “have nots”?  Like one of my many wise public school teachers used to tell us in class, “don’t just point out the problem, give me a solution.”  Whatever happened to the standard investment mantra of “you gotta spend money to make money”?  Why doesn’t it apply to education or social services?

So back to wondering what our children will think when looking back at the decisions of today.  Will they be asking questions such as: 

• “I looked it up, but can’t find a good definition for ‘middle class.’ What was that?”  
• “Really, there used to be a time when helping rich people get richer was more important than making sure that America had an educated and healthy workforce?”  
• “What was Social Security?” 
• “Is it true that big corporations were sitting on trillions of dollars in cash in 2011, but didn’t use any of it to invest in education, jobs, or America?” 

Or will they ask:

• “You old people sure were smart to make early childhood education, public education, health care, and most importantly, the children, a priority when you were planning for the future. What made you decide to do that?”

Children first, ideology second.  That’s how decisions should be made in order to prepare this great country of ours for the future.  I hope the comments made in the future by today’s children are reflective of smart decisions that the adults of today make. 

Troy Martinez is NM Voices’ Interim Executive Director

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Lenore Wolfe, a long-time early childhood leader, friend, and advocate, passed away October 7, 2011, at age 95. Lenore was a role model, mentor, and leader for many of us in the early childhood community. She touched many lives and remains with us as an example of how one person can truly make a difference.

Lenore was one of the individuals responsible for influencing the state of New Mexico to offer early childhood programs in the public schools. She established the Head Start program at Laguna Pueblo (which recently won a national award) and helped develop bilingual early childhood education on the Navajo Reservation and throughout the pueblos. Lenore worked with more than 18 tribal programs in many communities to integrate tribal and traditional values into their curriculum. This work even took her to Nepal to help develop a similar program.

Among her many pursuits, Lenore served on the APS School Board, was one of the founding members of the NM Association for the Education of Young Children, was a board member for NM Voices for Children, worked at the NM Public Education Department, and retired at age 93 from consulting with the city of Albuquerque’s child development centers. It was only fitting that she was honored on her 90th birthday with a reception inside the Roundhouse in Santa Fe, where she spent many hours advocating for funding and to establish standards for public school kindergarten education.

Lenore spent her long life working to improve the rights of others, following a path set down by her father in Oklahoma. As a college student in New York City, she was a labor organizer. She started her advocacy in early childhood education in the 1960s in New Mexico. She earned both her B.A. and M.A. in elementary education at UNM, and began her career as a preschool teacher and as an instructor at the Navajo Nation through UNM’s Navajo Study Bilingual Teacher Training Program.

Lenore was also known for her menagerie of birds and reptiles at her home, which was often a destination for various elementary school field trips. In her 50s, after her Nepal experience, she began traveling the world. In her 70s, she became a docent at the Rio Grande Zoo. In her 80s, she was a docent at the NM Museum of Natural History and, in her 90s, she worked with many child development efforts.

Only ten days before her death, she said, “It’s been a good life.” She indeed taught many people how to live.

Lenore Wolfe’s life will be celebrated at the UNM Alumni Memorial Chapel on Saturday, November 12, 2011, at 4:00 p.m.

In lieu of flowers, the family requests that contributions be made to the NM Association for the Education of Young Children’s T.E.A.C.H. scholarship program for training teachers for early childhood education (NMAEYC, 2201 Buena Vista SE, Suite 42, Albuquerque, NM 87106).

We will miss you, Lenore.

Myra Segal is the Deputy Policy Director at New Mexico Voices for Children with a focus on early childhood policy

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We congratulate Governor Martinez and CFYD Secretary Deines for putting some much-needed funding into child care services for our most vulnerable children. This has been a difficult time for families and for CYFD, as their budget came up short last year and they were faced with the difficult decision of where to cut. Now that more revenue arose in the department, I applaud CYFD and the Governor for making child care assistance a priority.

Child care assistance is key to enabling parents to work. Since many parents can only find low-wage jobs, and child care is so expensive (it’s more than UNM tuition and can eat a third of each paycheck), sliding-fee child care assistance also means that these children are more likely to get a higher quality of care. These are families living at poverty level, earning no more than $22,350 a year for a family of four. These families live on $1,860 a month while quality child care can cost $700 a month. When income requirements were tightened last year it meant that nearly 7,000 children were put on a waiting list. The wonderful news from the Governor’s announcement is that 1,300 families will be able to get assistance and get their child into higher-quality care.

The other part of this good news is that CYFD is reinstating the 4 percent that it had to cut in reimbursement rates to child care providers. Facing a budget shortfall last year, CYFD had to make tough choices. This reimbursement rate is already lower than the market rate, and child care centers that accept children on the program only get reimbursed for a portion of the actual costs (much in the same way that doctors who take Medicare and Medicaid patients are reimbursed). The funding shortfall has had real impacts on families and small businesses, as a number of child care centers had no choice but to close their doors.

It has been gratifying to see the media attention given to the impact that revenue decisions like the reimbursement rate cuts have had on small businesses and families. Yet, we aren’t ready to say “mission accomplished.” Too many of New Mexico’s children do not have the opportunity to access the important high-quality services that are proven to set them on the path to success in school and in life. I am happy for the 1,300 children who will now be getting higher-quality child care and hope that the 5,600 children who remain on the waiting list will be served very soon.

We urge you to follow the funding story as we approach the legislative session next January and hope that you will speak up with us in support of New Mexico’s children.

For more information about high-quality child care, see: www.newmexicokids.org

Myra Segal is NM Voices’ Deputy Policy Director.