New Mexico Legislative Update and Options

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January 27, 2010

An Open Letter from Scott Goold, Economist
SEA-CWA Local 7076 Agency Vice President

Aloha ~
I wanted to update you about the current state budget crisis and our response. Our union has teamed up with about 30 other action groups, rallying around Better Choices. This effort focuses on a number of ways to increase REVENUE rather than simply look for cuts to government spending.

Bills to watch include HB 35 (cigarette tax); HB 62 (combined reporting--making out-of-state corporations pay the same tax as New Mexico companies); and SB 184/SB 185 (both propose borrowing from permanent funds to cover state employee compensation)

In my work I came across a critical piece of information. I sent this to our leaders as it provides the economic rationale for NOT cutting state spending and worker pay:
Asked about the wisdom of raising taxes in a recession, Mr. Sheketoff pointed to a widely circulated paper co-written several years ago by Peter R. Orszag, now the White House budget director, that said focused tax increases on higher-income earners do less overall economic damage than steep spending cuts. source
Keep in mind every dollar spent by the state - worker pay or project - returns about $0.60 to the local economy. Each cut takes the same amount FROM the local economy. The best way to help the private sector, to help stimulate jobs and revitalize our economy, is for government to spend.

The options for New Mexico are (1) obtain federal help, (2) borrow from rainy day funds (Richardson added $4 BILLION to one permanent fund during his administration which now totals $13.4+ BILLION) or (3) increase taxes on our MOST RICH - in this order.

Although I don't have specific New Mexico information I have done the research at the national level about the growing disparity between haves and have-nots - the rich are winning. source

And, Bryce Ward, economist in Oregon, conducted excellent research about their situation: A new analysis of state wages shows that the gulf between Oregon's wealthy and everyone else continues to widen. source

Oregon's voters went to the polls this week and passed two referendums, Measures 66 and 67, that increase taxes and fees on the most wealthy (top 3%) as well as business. We need similar strong action here. source

This is our best angle at this time. State government must continue spending to help pull our state and national economy from the doldrums. We must remain focused and united in this call.

In unity ...