Martinez reiterates opposition to tax increase

SANTA FE - New Mexico Gov. Susana Martinez will not consider any tax increases as the state seeks to close a projected budget shortfall during an upcoming special session of the Legislature, her spokesman reiterated Monday.

State government needs to tighten its belt and raising taxes on families and businesses would make the state less competitive, hurt job prospects and “makes no sense,” said Chris Sanchez, a spokesman for the Republican governor.

Amid a downturn in the oil and natural gas industries, state revenue fell nearly 10 percent in the year ending in May compared with the previous 12 months.

Martinez has instructed state agencies under her control to trim general-fund spending by 5 percent during the budget year that began in July, with some exceptions for matters of health and public safety.

The governor’s opposition to new taxes puts her at loggerheads with state Sen. John Arthur Smith, D-Deming, chairman of the Legislative Finance Committee. He says new revenue streams and tax loopholes must be examined if the state wants to close its projected deficit.

Senate Democrats are opposed to any funding cuts to public schools or higher education, which make up more than half the state budget, leaving little room for other adjustments, he said.

“We’re in a crisis situation and nobody wants to step to the plate and suggest anything except cut, cut, cut,” Smith said.

Smith has warned of a possible $200 million budget shortfall for the fiscal year that ended in June, and a projected deficit of as much as $500 million for the current fiscal year.

Smith expects the Legislature will have to tap into a $220 million reserve fund created under a settlement with major tobacco companies. Public health advocates say the funds should be reserved for smoking cessation and treatment efforts.

Smith estimates that the governor’s 5 percent spending cut at executive agencies would save about $50 million, well shy of what is needed to close the budget gap.

The governor’s office has not provided an estimate of actual savings.

Sanchez said it would be irresponsible to ignore the serious budget challenge.

“Legislators shouldn’t delay doing what the people of New Mexico expect us to do because of election year politics,” he said.