Computer tax model delay doesn’t add up for NM

A critical tool state lawmakers have maintained is necessary to move forward with an overhaul of New Mexico’s tax system isn’t yet ready, despite a December deadline and the fact the 30-day legislative session is now underway.

But it’s unclear who dropped the ball, and that’s simply unacceptable for taxpayers who are the ones paying Ernst & Young $228,000 for the computer model, which is supposed to help state lawmakers analyze potential changes to the tax code. Worse yet, the delay could provide yet another reason to once again stall desperately needed tax reform — from lowering and broadening gross-receipts taxes, to eliminating pyramiding, to establishing equity between brick-and-mortar and internet sales — and that is truly unfortunate for our state’s residents and businesses.

Ernst & Young, which is being paid $400,000 for the model and other work, was to turn it over to lawmakers last month — unless the state failed to provide the required data in time. Raúl Burciaga, director of the Legislative Council Service, says the state turned over the data without delay, though there was some back and forth on formatting.

Meanwhile, the model is still under development and won’t be available to model tax reforms until finalized.

Gov. Susana Martinez’s administration, meanwhile, says it isn’t surprised by the delay, maintaining that legislative Democrats orchestrated the need for the model as a stalling tactic in the first place.

That argument appears to be undercut by the fact that it was Republican Sen. William Sharer of Farmington who actually pushed for the study last year after the governor and Democratic lawmakers hit an impasse on tax reform and, in some instances, couldn’t even agree on how proposed changes would affect revenue. Sharer proposed the tax study and model as a way to provide unbiased information that would help lawmakers craft their proposals.

Hiring a firm to provide policymakers with unbiased information on this massive tax code overhaul was reasonable, and, some might argue, the prudent thing to do. But it’s completely unreasonable to hire an international firm to do that work, only for the key deliverable to be stalled as yet another legislative session ticks by.

And as residents and business leaders continue to do without reforms needed to improve the state’s recovering economy, job growth and bottom lines.

Senate Majority Leader Peter Wirth, D-Santa Fe, called the situation frustrating. A few other words come to mind, including outrageous, incompetent, wasteful and absurd.

Burciaga told the Journal it isn’t clear whether the model will be ready by the end of the session, although he’s hopeful it will be.

With all due respect to Mr. Burciaga, that’s a little like a high school senior telling his English teacher that he didn’t quite finish his final exam, although he’s hopeful that he will be done by graduation. In the real world, that rationale would never fly.

But alas, we’re dealing with Santa Fe, where deadlines come and go, and come and go, and where taxpayers foot the bill whether the work gets done on time or not.

Lawmakers owe it to taxpayers to get to the bottom of the delay in rolling out this computer model. In the meantime, it is heartening that a number of lawmakers and the governor seem poised to move forward with some of the tax reforms even without the model.

Which begs the question of whether the model and its $400,000 total price tag was even needed in the first place.