Liquor sellers leery of tax hike
As J.R. Palermo sees it, the year has been bad enough for restaurants, bars and patrons.
He’s none too happy with a proposed 2 percent excise tax the state could impose on alcohol sales as part of a sweeping liquor law reform bill.
Palermo, the owner of Tiny’s Restaurant & Lounge, a fixture in Santa Fe since 1950, has been an outspoken critic of New Mexico legislators’ efforts to overhaul what many people call an outdated and cost-prohibitive liquor license system.
He said House Bill 255 is “not friendly to the industry.”
At the top of his many objections to the bill is a plan to allow restaurateurs to purchase new licenses to serve liquor at a fraction of the costs paid by longtime business operators. The 2 percent tax would help pay for proposed tax breaks for license-holders whose investments might be devalued.
The tax would amount to a 12-cent increase on a $6 beer.
“Our customers are already struggling with whatever from what the pandemic had brought on them,” Palermo said. “The customers will just pay [the tax] and complain that I increased my prices.”
State Rep. Antonio “Moe” Maestas, D-Albuquerque, argues the 2 percent tax is necessary to offset the losses of longtime liquor license owners, who may have paid $350,000 or more to sell spirits in a state with a limited number of available licenses — assets bought, sold and leased like real estate. Legislation to overhaul the system, and allow more restaurant owners to serve spirits along with beer and wine, would offer tax breaks of up to $200,000 over a four-year period to restaurant owners with existing licenses.
Retailers with liquor licenses would get a tax break up of up to $100,000 over four years.
“We must raise revenue to offset the tax deduction,” said Maestas, co-sponsor of HB-255. The bill is working its way through the
Legislature — with a possible Senate committee hearing Wednesday. “It’s reasonable to offset that deduction.”
But, Maestas said, some advocates of the bill are pushing to drop the tax.
Santa Fe Spirits owner Colin Keegan would like to see that happen. “New Mexico has quite high liquor taxes as it is, generally,” said Keegan, who supports most provisions of HB-255.
“It’s a good thing to modernize the liquor laws,” he said.
Rowley Farmhouse Ales owner Jeffrey Kaplan envisions customer confusion with multiple lines of taxes on a bill.
“Customers will say, ‘What’s this
all about?’ “Kaplan said.
But he acknowledged the tax would amount to just a few cents on happy hour drinks, and “the high-end connoisseurs, they don’t care.”
“I don’t think it will affect people buying alcohol,” he added.
Sen. Daniel Ivey-Soto, D-Albuquerque, one of the co-sponsors of HB-255, said he didn’t expect the “level of pushback” to the tax, which he said “simply gets wrapped up in the cost of the drink.”
But, he said, “I have heard that it has caused people some stress, so it’s something worth looking at.”
Dozens of business owners with liquor licenses have voiced opposition to the legislation, which
also would allow wine and beer deliveries with restaurant meal orders. They say it will render their licenses — assets used to secure bank loans and business mortgages — nearly worthless.
The tax break was introduced to assuage those concerns. Lawmakers also included a provision allowing any business owner who purchased a liquor license before June 30 of this year to forgo paying annual license renewal fees.
Supporters said the legislation will reform a decades-old system in which people who paid hundreds of thousands of dollars for liquor licenses years ago hold a monopoly on the bar and restaurant business because newcomers can’t afford to buy in.
Over 710 restaurants in the state have a license to serve liquor. A similar number purchase annual licenses, at a cost of about $1,000, to serve beer and wine.
Rep. Rod Montoya, R-Farmington, another co-sponsor of the bill, said he thinks the 2 percent excise tax will be deemed unnecessary as the legislation makes its way through the Senate.
Other changes to the bill are likely as well, he said Tuesday.
“I’ve heard amendments are coming,” Montoya said. “I don’t know how many, and I don’t expect they will all get through. But there’s been no desire to kill the bill by any of the parties, from what I can tell.”
Earned sick leave could be used for any type of personal or family member illness or health condition or medical care, curative or preventive, including to attend school meetings related to a child’s disability and absences connected to domestic violence, sexual assault or stalking of the employee or a family member.
Private employers in New Mexico may no longer get to decide whether paid sick leave is a benefit they want to offer their workers.
A bill that would ensure employees in the state have access to paid time off when they’re sick cleared the Senate Tax, Business and Transportation Committee on a party-line 6-3 vote Sunday.
“Access to paid sick leave protects workplaces, families, and communities statewide,” read a tweet sent from Gov. Michelle Lujan Grisham’s account minutes after the vote. “I appreciate so many key stakeholders being at the table for this important discussion and I look forward to signing this legislation when it gets to my desk.”
Known as the Healthy Workplaces Act, House Bill 20 would require private employers in the state to provide workers at least one hour of paid sick leave for every 30 hours they work, or 64 hours per year. The bill, which doesn’t prohibit an employer from offering more generous benefits, includes misdemeanor and financial penalties for violations of the proposed law.
The bill, which passed the House of Representatives on a 36-33 vote Feb. 28, heads next to the full Senate.
The measure has sparked opposition from business owners who say the mandate will not only be costly but comes on the heels of a public health crisis that has decimated their finances. Efforts to exempt smaller businesses from the proposed law have failed.
Terri Cole, president and CEO of the Greater Albuquerque Chamber of Commerce, said her organization supports a statewide policy on mandatory sick leave “so long as it’s reasonable and accommodating to small employers.”
Bill Lee, a business owners and member of the Gallup-McKinley County Chamber of Commerce, said he’s experienced a year-overyear loss of more than 90 percent.
“While I thank the legislative bodies for their hard work and their help provided during the session,” he said, referring to several pandemic relief measures, “that aid is short term and the devastating effect of bills like HB-20 will go on in perpetuity.”
Bill McCamley, secretary of the New Mexico Department of Workforce Solutions, told lawmakers the governor would support the bill as long as its implementation is delayed by a year. He said the administration believes the year delay “not only helps the business community adjust” to the mandate but also would allow his department “to properly plan, train our workers to enforce it and also ask for additional support in next year’s budget.”
“If there are two things that the pandemic has revealed to us, it is the a) importance of our essential workers that are out there on the front lines every day … but No. 2, it has also revealed how no one should have to go to work sick,” he said. “That’s really, really bad for the workers themselves, and it’s bad for all of us that are their friends and neighbors in the community that interact with them.”
Sen. Michael Padilla, D-Albuquerque, said he was happy to hear the governor would sign the bill as proposed.
“I think that needed to be said. I think that was super important to other legislators who are paying attention to this,” Padilla said.
Sen. Martin Hickey, D-Albuquerque, called it a “tough bill.” Hickey, who represents a socioeconomically diverse district, said he’s been receiving “very, very heavy emails and calls” from constituents who want him to support the bill while also hearing from small-business owners who say the mandate is going to be very difficult to meet. While he said he’s “very empathetic” to business owners, he said he can “do no harm” as a physician, referring to the Hippocratic Oath.
“For me, I would be doing harm if I were not to support this bill, and so my apologies to the top part of my district, but I have to follow my oath of do no harm and stand in support of this bill,” Hickey said.
Supporters of the measure described it as a basic protection for employees, particularly lowwage earners who sometimes have to choose between going to work sick or risk losing their jobs.
Under the bill, workers would have wide discretion over how to use the sick leave they earn.
“Earned sick leave could be used for any type of personal or family member illness or health condition or medical care, curative or preventive,” including to attend school meetings related to a child’s disability and absences connected to domestic violence, sexual assault or stalking of the employee or a family member, according to a fiscal impact report on the bill.
Sen. Leo Jaramillo, D-Española, said “many people” from his Northern New Mexico district reached out to him urging him to support the bill.
“As a chief of staff,” said Jaramillo, who works at Los Alamos National Laboratory, “I know that our greatest asset as employers is our workforce and so I’m thankful for this bill.”
The New Mexico Senate passed a controversial bill Monday (March 15) that would allow terminally ill patients who are of sound mind to take their own lives with the aid of a physician.
The bill will soon head to the desk of Gov. Michelle Lujan Grisham, who is expected to sign the measure into law once the state House of Representatives, which already has approved the bill, concurs with a number of amendments.
“The governor has been a lifelong advocate for seniors and their independence, as well as for the importance of dignity and respect in making choices about one’s own health and treatment,” Nora Meyers Sackett, Lujan Grisham’s press secretary, wrote in an email.
Sen. Liz Stefanics, D-Cerrillos, described the measure as “compassion for the suffering” and said nine other states and the District of Columbia have passed similar legislation.
“A 2020 Gallup poll indicates 74 percent of Americans support an end-of-life option,” Stefanics
said at the end of a 2½-hour debate. “This bill is to ease suffering, and what it has done is it has increased the use of palliative care and hospice care in the states that have a law similar to this.”
The Senate passed the measure on a 24-17 vote, with three Democrats, Pete Campos of Las Vegas, George Muñoz of Gallup and Benny Shendo, Jr., of Jemez Pueblo, joining with Republicans in opposition.
“I understand that some people cannot vote for this,” Stefanics said before the vote.
Republicans raised various concerns about the measure, from the moral dilemma doctors may face to the possibility that older people would want to take their lives due to feeling like they were a burden on their families.
“My concern is that when we legalize this practice, as we’ve seen in other states, the overall suicide rate goes up,” said Sen. Gregg Schmedes, R-Tijeras. “When I use the word ‘suicide,’ I don’t use it flippantly. Suicide’s the intentional taking of your life.”
Though Stefanics initially said “it is explicit that medical aid-indying
is not suicide,” she then said “physicians, nurses and loved ones are protected against prosecution for assisting suicide.”
To qualify for aid-in-dying under the bill, a patient would have to be an adult, a New Mexico resident and mentally capable of making an informed decision.
“They must have a terminal illness diagnosis of no more than six months,” Stefanics said. “That person must also — after going through the requirements — must be able to-self administer the medication for a peaceful death.”
The bill includes a 48-hour waiting period from the time a prescription is written to the time it’s filled, which Sen. Ron Griggs, R-Alamogordo, said was too short.
“I don’t believe that is the right thing we should do as a body,” he told Stefanics. “But I applaud you for for standing up here and putting this bill forward because regardless of how the vote goes, regardless who votes yes and who votes no, this is an issue that touches all of us and will touch all of us, I imagine, at some point in time.”
Stefanics said the 48-hour waiting period ensures “timely access for critically ill and suffering patients.”
In a statement issued after the vote, Rep. Debbie Armstrong, D-Albuquerque, one of the lead sponsors of the bill, said everyone deserves “to live life the way we choose, and when facing a fatal
prognosis, to also pass away in aa peaceful manner.”
The bill, known as the Elizabeth Whitefield End-of-Life Options Act, is named after a judge who died of cancer in 2018 after advocating for such a law. Though senators approved an amendment that changes the short title of the bill to the End-of-Life Options Act to keep in line with the way laws are written, they said her name would continue to be memorialized in statute.
“Elizabeth Whitefield was a constituent of mine,” said an emotional Sen. Bill O’Neill, D-Albuquerque. “I think she would agree that the important thing is to have this bill move forward, whether her name’s on it or not.”
A bill that would allow the state of New Mexico to adopt air quality and hazardous waste rules more stringent than federal regulations survived a challenge Friday (March 12) from Senate Republicans, who had previously stalled the measure with a procedural maneuver that kept it in limbo for days.
Sponsored by Senate Majority Leader Peter Wirth, the bill would amend the Air Quality Control Act and the Hazardous Waste Act to allow rules more rigid than federal standards.
“In each case … there must be substantial evidence that the proposed state rules are more protective of public health and the environment,” said Wirth, a Santa Fe Democrat.
The bill passed along a mostly party-line 23-15 vote. Democrat George Muñoz of Gallup sided with Republicans in opposing the measure, which goes to the state House of Representatives for consideration.
Wirth argued that Senate Bill 8 would provide what he called consistent, New Mexico-focused environmental oversight.
“This is particularly important where federal regulations are either nonexistent or change as [a] federal administration changes or when the federal law does not consider New Mexico’s unique circumstances,” he said.
Republicans labeled the measure a “radical anti-energy bill” that would allow the state Environment
Department to implement excessive regulations, and they pushed unsuccessfully for an amendment that would include an opt-out provision for counties.
“This is what’s referred to in the populace as red tape, and this bill represents one more approach to that,” Senate Minority Leader Greg Baca, R-Belen, said.
Wirth later countered that his bill was about state’s rights.
“This is a question of not us ceding our rights, but us exerting our rights,” he said.
Sen. Gay Kernan, R-Hobbs, said she was worried the state would enact rules and regulations more stringent than federal standards related to oil and gas, which brings in about 32 percent of the state’s revenue. She was especially concerned about independent producers with older wells.
“Frankly, it’s very possible that many of the independent producers will not be able to comply with some of the rules and regulations that will be implemented in this law,” she said. “I’m just concerned that we’re focusing in — again — on an industry that does so much for this state. And the future is certainly questionable with regard to that because I just think at some point, they’re just not going to be able to survive, and we’re going to have many of these companies move into Texas or simply shut down.”
Sen. Bill Sharer, R-Farmington, raised concerns about the adoption of state standards “that simply were not achievable.”
“This is a big deal,” he said.
“This bill, as it stands today, even with the substantial evidence requirements, I think can be manipulated to shut down anything that the government wants to shut down and not just this governor, any governor in the future. Any governor, they can look at it and say, ‘You know what? I don’t
like widget manufacturing in the state of New Mexico. We’re going to set a standard now, because we found substantial evidence, and we’re going to destroy that industry.’ “
The bill had been in limbo since Monday, when another Republican, Sen. David Gallegos of Eunice,
requested a “call of the Senate,” a legislative procedure that requires every member of the chamber to be physically present in the Roundhouse for consideration of legislation. At Gallegos’ request, the call was removed ahead of the nearly two-hour debate.