Local lawmakers plan for busy summer
San Juan County representatives in the state Legislature plan to focus on tax reform and financial policies this summer
FARMINGTON — Local lawmakers will stay busy during the legislative off-season, working to shape policies on a number of issues ranging from tax reform to natural resource development.
Sen. Bill Sharer, R-Farmington, who serves on the interim tax policy committee, said he will continue pushing his plan to simplify the state’s gross receipts tax system. Sharer said the current structure is complicated and discourages new businesses from moving to New Mexico.
"It’s not that we are overly taxed," he said. "But we are confusingly taxed."
Sharer proposes replacing the various taxes levied at state and local levels with a flat, across-the-board 2 percent sales tax.
The plan also eliminates the incentives and credits many companies currently enjoy, which has emerged as a sticking point in the past. But Sharer said he will work this summer to commission an independent study showing his plan can both benefit businesses and fund government services.
"That's been the problem in the past," Sharer said. "Nobody believes the numbers."
Sharer’s fellow committee member, Rep. James Strickler, said he supports efforts to simplify the system. The Republican from Farmington said he will also advocate for providing tax relief to the oil and gas industry while commodity prices remain low.
"We’re getting clobbered right now and losing a lot of jobs," Strickler said.
Strickler has drafted a plan that would cut the amount of severance taxes companies pay if oil and gas prices dip below a certain level. Similar policies exist already, but, Strickler said, the current thresholds are too low to help the struggling industry.
He proposes companies operating the low-producing, marginal wells that are common throughout San Juan County pay 50 percent less severance taxes if oil prices drop below $45 per barrel.
Another committee member, Rep. Rod Montoya, R-Farmington, said he will introduce a plan that also involves severance taxes, but on the opposite end of the energy spectrum.
Montoya said he thinks the state should consider charging a severance tax on renewable energy, such as solar and wind. Revenue collected from extraction industries currently funds most of the state's education system.
With public sentiment leaning toward replacing fossil fuels with renewable resources, Montoya said the state must think ahead.
"Since that’s the direction that a lot of environmentalists and politicians want to take us, we need to find a way to replace the revenue," he said.
Montoya said he anticipates pushback on the proposal among certain groups, but hopes to at least spark a conversation on the topic.
Other San Juan County legislators will focus on more short-term solutions for the state's financial situation.
Sen. Steve Neville and Rep. Paul Bandy both serve on the Legislative Finance Committee, which sets the state budget. The two Republicans from Aztec said the committee will need to keep a close watch on economic trends in light of the fragile budget situation.
Neville said if tax revenue teeters in the wrong direction, lawmakers may be called back to Santa Fe for a special session this fall, at the height of election season.
With many government entities struggling financially, Neville said it's paramount the state resists dipping into its reserves.
"Someone wants to tap into the funds every year," he said. "But we need to make sure there’s money left for children and grandchildren."
Bandy echoed a need to keep New Mexico operating within its means, and he advocated for the same thing on the federal level.
Bandy said that over the summer he will continue working with state legislators across the country to curb spending in Washington, D.C. The effort involves gathering petitions from at least 34 states to call a convention, where a constitutional amendment could be proposed that woudl require the federal government to balance its budget.
A little closer to home, Bandy said he will also push to simplify the rules surrounding water rights. As a rancher and member of the Water and Natural Resources committee, Bandy said he hopes to work with the state Office of the State Engineer to make the process of establishing water rights more efficient. New Mexico currently relies on a complicated judicial process, which costs excessive amounts of time and money, Bandy said.
"It really shouldn't be that big of a deal," he said.
Water issues will also take precedent for Rep. Sharon Clahchischilliage. The Republican from Kirtland said her district suffers from a lack of infrastructure, and she will work to coordinate with both the state and the Navajo Nation to make improvements to the area's water treatment facilities.
Clahchischilliage said her constituents have also expressed a desire to be connected to natural gas pipeline, rather than relying on expensive propane.
In addition to her work on the interim committees, Clahchischilliage said she will focus on meeting with constituents.
Brett Berntsen covers government for The Daily Times. He can be reached at 505-564-4606.