Friday, March 5, 2010

New Mexico Legislature Concludes its Special Session - We Have A Budget

Yesterday the New Mexico Legislature concluded the Special Session called by the Governor for the purpose of passing a budget for the new fiscal year. It was a terribly grueling process and session. I am copying below a version of the email I sent to my email distribution list yesterday that sums up what we did in the session:

Dear Friends,

I write to update you on what occurred during the recently concluded special session of the New Mexico Legislature. First, and most importantly, I am very pleased to tell you that the legislature passed a balanced budget. It was a very difficult session, but the work is complete, and I would like to share with you some of the details of the new budget.

Regarding the state’s expenditures, the new budget continues the process of cutting waste and unnecessary spending that began at this time last year. With the passage of the new budget, the legislature has reduced state spending by 12% (more than $700 million) from the spending level of just one year ago. We have cut across the board, but we have done so carefully to ensure that critical education, health and human spending has been maintained. With specific regard to education, I am very proud that in spite of the tremendous challenges facing the budget, the House passed a budget package that actually increased classroom funding by $1.7 million. This was critical to my support of the budget because education is so important to the families of our community.

Unfortunately, the Senate failed to act on the full budget package. Because of that inaction, less than the full budget package passed the legislature, and education will see a cut of approximately 1.2%. I am terribly disappointed that education will see a cut. It was not the will of the House, but the Senate simply would not agree to fully fund education.

In spite of the cuts, the legislature found it necessary to increase revenues in order to balance the budget. I voted for a limited and responsible tax package, but I did so reluctantly. I voted for the package in the firm belief that it was the only way to avoid debilitating cuts to education and other critical spending on health care. On the positive side, for the first time in memory the legislature added major progressive elements to our tax code. The inclusion of new progressivity in the tax code has been a major goal of my legislative service, and I am glad to have made significant progress on this front. The tax package includes six elements:

· First, the package includes changes to the state compensating tax, which will begin to level the playing field between New Mexico companies and out of state corporations.

· Second, the package removes the double-deduction for state income tax. This change, referred to as the PIT add-back, means New Mexico joins forty other states that implement this sound tax policy.

· Third, the package increases by 20% the low-income comprehensive tax rebate to reduce and eliminate the impact of the tax changes on low income earners.

· Fourth, the package increases the tax on a pack of cigarettes by $.75 and earmarks a third of that for education.

· Fifth, the package includes a 1/8% increase in the gross receipts tax.

· Sixth, the package includes a provision that ends the exemption food has from locally-imposed gross receipts taxes. This element also ends the outdated tax policy that has sent to city and county governments hundreds of millions of dollars that could have been better spent on important state priorities like education.

Neither the budget nor the tax package is perfect, but we made tremendous progress in making the package vastly more progressive than when the negotiations started. We also provided truly progressive solutions in both the budget and tax package.

During the regular session of the legislature that ended two weeks ago, several important initiatives passed. First, I sponsored in the House the Natural Heritage Conservation Act, which for the first time will allow the state to obtain federal funds for conservation and restoration projects statewide. I also sponsored in the House the legislation that has ended “double dipping,” the practice that used to allow state workers to retire then return to state employment with both a salary and their retirement benefits simultaneously. Both of these measures passed and went to the Governor’s office for action.

I also introduced a bill that would have moved as much as $5 billion of New Mexico’s money from large national banks into community banks and credit unions statewide. The bill, House Bill 66, received national attention and passed the House unanimously but failed to receive a vote on the Senate floor in the final hours of the session. You can read about the bill by clicking HERE. I was deeply disappointed that this bill did not pass, but I will certainly reintroduce it in future sessions if I am reelected to the House. Two other bills I worked on during the session addressed serious environmental problems in New Mexico. I carried bills that would have allowed the state to recover damages for injuries to aquifers and other types of groundwater from industrial pollution and that would have allowed the state to deny permits to “bad actors” that repeatedly violate the terms of their air quality permits. The “bad actor” bill, House Bill 276, was only one vote short of passage in the House. For a complete list of the other bills I carried in the session, including the State Ethics Commission Act and legislation designed to end pay-to-play, please visit the legislature’s website at

Finally, I want to thank you for the honor and privilege of serving in the New Mexico House. I am so proud to represent Santa Fe in the House and hope that my service has lived up to the expectations of my constituents and community. Thank you for your time reading this message. Please do not hesitate to contact me if you have any questions or if I may be of service to you.


Brian Egolf

New Mexico Representative, District 47