A missed opportunity on taxes

Ifirmly believe that the sun is rising and not setting on New Mexico. Our state has an abundance of beauty, a mild climate, and a wealth of recreational opportunities that make it attractive to retiring baby boomers and gig-economy millennials alike.

But to realize this new day of economic opportunity in our state, we must be willing to change the status quo. All New Mexicans agree that our state’s sales tax system, the gross receipts tax, is broken. With its hundreds of special interest deductions, exemptions and credits, New Mexico’s gross receipts tax is as stable as a block of Swiss cheese. If we are to grow as a state, it must be fixed.

Over the last 30 years, numerous task forces and blue ribbon panels have been convened to identify the best ways to modernize New Mexico’s tax code. Last year, I chaired one of these efforts, an interim legislative committee called the Revenue Stabilization and Tax Policy Committee. It was a bipartisan and bicameral effort with over 34 legislators participating in the committee’s deliberations. The mission of the committee was simple: Review the state’s current tax structure, identify best practices from other states, and develop legislation to fix the deficiencies in our tax code.

The committee met for 11 days last year and spent close to 50 hours listening to stakeholder testimony and discussing legislative options, in addition to the thousands of hours of staff and legislator time spent researching and analyzing scenarios. The outcome of the committee’s work was assembled into a comprehensive tax reform package, House Bill 412.

HB 412 would have made New Mexico’s sales tax system simple, uniform and fair. It would have broadened New Mexico’s tax base by eliminating most special interest carve-outs, ensuring that every industry paid its fair share. Broadening the tax base would have enabled a lower overall tax rate, benefiting all New Mexicans, regardless of income.

These long-overdue reforms would have provided a more stable and reliable revenue source for the state that could help us avoid future budget crises. More importantly, it would have made our taxation system more competitive with neighboring states, stimulated business growth and created new jobs for New Mexicans.

HB 412 received more scrutiny than any other bill I can recall. The House Taxation and Revenue Committee held three meetings, totaling eight hours, to thoroughly vet the bill. Both the Senate Corporations Committee and the Senate Finance Committee reviewed the bill during a special four-hour meeting. Every detail was dissected in full view of the public.

Despite all this review, as the clock ran out on the 2017 legislative session, legislators punted on a golden opportunity to change New Mexico’s economic future. After thousands of hours of debate, study, research, testing and public testimony, it’s laughable to claim that legislators did not have enough time to evaluate the tax reform measures included in HB 412. Legislators had all the information, but when it came time to act, they gave in to special interest lobbyists and blinked. Unfortunately, the average New Mexican did not have a lobbyist and ended up the loser.

The people of New Mexico did not elect us to study problems; they elected us to act on the challenges confronting the state. New Mexico’s best days can be ahead, if we are willing to seize opportunities when they are offered. HB 412 was such an opportunity. The New Mexico Legislature let this chance slip by this time. Let’s all hope it has the vision and courage to act next time. Our children’s future depends on it.

Republican Rep. Jason Harper represents Rio Rancho.