Padilla resignation leaves upheaval at tax department
Deputy secretary says he’s had several meetings to reassure staff
A state Taxation and Revenue Department official Tuesday described an agency struggling to move forward after Secretary Demesia Padilla’s resignation last week.
“I’ve had to have several town hall meetings with our staff,” John Monforte, the deputy secretary who is now leading the department, said at a conference hosted by the New Mexico Tax Research Institute. “They want to know how to explain to their friends and family that the Attorney General’s Office raided the department. They want to make sure they are following people of high ethics.”
Padilla stepped down Thursday after the raid. A search warrant affidavit filed by the AG’s Office indicated the office was investigating her for potential criminal acts, including tax evasion and embezzlement. Padilla was also the subject of an investigation by the state auditor for possible preferential treatment of a former accounting client.
“She is innocent until proven guilty,” Monforte said. “But at the very least, there’s been the appearance of impropriety at a great cost.”
He emphasized that the department is committed to fulfilling its duties to the public despite the upheaval. In addition to executing its tax-collection responsibilities, the agency will propose several tax-related measures in the coming legislative session, according to Monforte.
Monforte said one of them will offer various corrections and clarifications to the tax code, including a change responding to a 2015 state Court of Appeals decision. In that decision, HiCountry Buick GMC Inc. v. New Mexico Taxation and Revenue Department, the court ruled the department could not collect penalties and interest imposed on a business that had changed ownership due to the way the word “tax” is defined in the statute. The effect of that decision on other businesses costs the state $1.1 million a year in tax revenue, he estimated.
Monforte said the path ahead for the agency will be challenging, though he is confident in his “good team.”
“I’m as interested as you are in what’s going to happen next,” he said. “It will be an interesting time period for the department as we move forward.”