The Associated Press
SANTA FE — A proposal to speed up the phase-in of personal income tax cuts was derailed Thursday by a House committee on a party-line vote.
The measure by Rep. Justine Fox-Young, R-Albuquerque, would lower the top marginal tax rate to 4.9 percent this year rather than waiting until 2008 under the schedule in current law.
New Mexico is enjoying a large revenue windfall and Fox-Young said surplus money should be used to provide faster tax relief for New Mexicans. The reductions will cost about $30 million in the current fiscal year and $60 million in the next budget year.
“It’s an opportunity to put the money back into the hands of taxpayers,” Fox-Young told the Consumer and Public Affairs Committee.
Rep. Al Parks, D-Albuquerque, said he favored the current phase-in schedule, contending it was fiscally prudent to gradually cut the income tax.
The committee scuttled the legislation on a 4-3 vote, with Democrats voting to “table” the bill.
Lawmakers can effectively kill a measure by setting it aside, which is a procedural move called tabling.
Under current law, the top income tax rate is 5.3 percent and will remain there in 2007 and then drop to 4.9 percent in 2008.
Minimum wage increase on move
SANTA FE — A minimum wage hike to $7.50 an hour easily passed a House committee on Thursday and even its opponents acknowledged some increase appears inevitable this year.
The House Labor and Human Resources Committee voted 5-2 along party lines — Democrats for and Republicans against — for a bill that would raise the hourly wage from the current $5.15 as of Jan. 1, 2007.
The measure, which also builds in annual increases pegged to inflation, would have to clear another committee before it reached the full House for a vote.
“There are far too many people who are struggling to make ends meet,” House Speaker Ben Lujan, D-Santa Fe, the bill’s sponsor, told the committee.
Opponents said it would drive up prices and be too tough on employers, especially small companies and those in rural areas.
“We are encouraging economic development for the states of Texas and Arizona because businesses will not be coming in to this area,” said Rep. Candy Spence Ezzell, a Roswell Republican who voted against it.
Backed by a coalition of labor, church, community and anti-poverty groups, Lujan’s is the simplest and most dramatic of at least three pending proposals.
Senate Majority Leader Michael Sanchez, D-Belen, proposes to increase the wage floor to $7.50 next year but allow small employers to take tax credits for three years to help offset it.
Committee approves bed tax repeal
SANTA FE — A House committee endorsed a proposal Thursday to repeal a tax on nursing home care, but it shelved Republican-backed measures that would refund to New Mexicans the money paid because of the tax.
The Consumer and Public Affairs Committee gave unanimous approval to a measure that would eliminate the so-called nursing home bed tax starting in July. It’s a proposal that seems headed for enactment this session.
Gov. Bill Richardson is calling for repeal of the tax and the Senate already has passed its own version of the repeal legislation.
In 2004, the state imposed a nearly $9-a-day surcharge on each occupied bed at nursing homes and intermediate care facilities for the mentally retarded. The tax was to help finance Medicaid and is estimated to generate almost $21 million for the state in the next budget year. Supporters say the tax is no longer needed and can be a hardship for some fixed-income residents in long-term care facilities.
Under current law, the tax will be eliminated on June 30, 2007. The bill approved by the committee will speed up the repeal by a year.
The committee — on party-line votes — tabled two measures by Republicans that would repeal the tax and provide for a rebate, including to elderly New Mexicans. One of the measures would have extended the rebate to health care providers or institutions that paid the tax. Republicans favored the rebate measures; Democrats voted to shelve them.