Budget/furloughs/layoffs

 

Thanks to all of you who have been making calls to legislators on the House Appropriations and Senate Finance Committees. Those calls are helping to move legislators away from hard furloughs and layoffs, and towards other revenue and cost solutions. 

 

As a heads up, there is some talk of temporarily increasing PERA contributions (with lower wage employees paying significantly less than exempt/high salary employees) as a way of increasing the state's fiscal stability. While that is preferable to furloughs and layoffs, we're still fighting to prevent any real dollar changes to paychecks. Keep the calls coming (see the last email below for names, numbers, and emails).

 

We're far from out of the woods on this, and there is no other way to say it but that it all may get worse before it gets better. But your union is fighting for you every step of the way. One of our major plans of attack is to pursue revenue sources that are not harmful to the economy. The memo we're distributing on revenue is both attached and pasted below.

 

Child care organizing

 

Earlier today, about 50 home-based child care providers went through a brief legislative training and then did a terrific job of lobbying key members in both houses. Before the lobbying, they attended the House Health and Government Affairs Committee, where the committee saw a strong show of support for HB 245 (Miguel Garcia). There were some good and tough questions from committee members, who were called to the floor prior to the final vote.

 

Please call and email Representative John Heaton (D-Carlsbad) 986-4432 jheaton@caverns.com and Representative Jeannette Wallace (R-Los Alamos) 986-4452 wallace@losalamos.com. They are still wavering on the bill, and we need at least one of them to vote for the bill or "take a walk" for us (meaning leaving the room when the vote comes up. The bill is likely to continue to be heard this Saturday morning at about 8 a.m.

 

Arbitration

 

Our Senate arbitration bill (SB 164) has sailed through Senate committees with strong bipartisan support, but has run into the buzzsaw of our terrible economic conditions. Senate Finance Committee Chair John Arthur Smith, by a narrow voice vote, was able to send it to his committee for review there.

 

While Senate Finance is widely regarded as a graveyard for bills, we have strong assurances from key Dems on this committee that our bill will get a fair hearing. We also are asking our key allies in both houses to pressure SFC to hear the bill.

 

As we get closer to a hearing (or if it's delayed more than a few SFC hearings), we will ask for our members to pull out all the stops to both get a hearing and get it passed out of committee. The House version (HB 15), which had no major problems in the House, will be scheduled for Senate Public Affairs (SPAC) in the next 10 days. It will likely go through SPAC and Senate Judiciary easily, and then we're going to face the Senate Finance battle with the Speaker directly on our side.

 

Other bills

 

There are some terrible bills that we're in the process of derailing, like the proposal to change PERA to minimum 30 years of service AND 55 years of age (HB 573, Heaton).

 

About half an hour ago, AFSCME had one of its strongest and weirdest bipartisan victories as we passed a bill limiting return to work for PERA employers (HB 246, Miguel Garcia). 

 

What made the victory especially strong (and strange) was that we teamed up with hard-core anti-union Republican Candy Spence Ezzell and moderate Republican Dennis Roch to prevent the Municipal League from gutting the bill with an amendment that would have effectively allowed unlimited double-dipping. We also had Dems Eleanor Chavez and Miguel Garcia on our side in the amendment battle.

 

We also testified earlier today in favor of SB 305 (Lopez) which prohibits disciplining employees for discussing pay on the job. This is a key measure to ensure that all workers have the right to learn about their employers' pay structure to uncover discrimination wherever it exists.

 

There are literally dozens of bills we're monitoring, including ones that would require unions and other non-profits to disclose things like member lists and addresses if we're involved in politics (HB 808, Bandy), or that would stop AFSCME from participating in PERA elections (SB 451, Ingle). If any of these other bills start to pose a serious threat, we will ask you to again mobilize on phones, emails, and in person to battle these attacks.

 

Please keep the calls coming on the budget and to our two major child care bill targets, and look for an update soon on our next arbitration bill targets. --Carter

 

BUDGET MEMO

 

To:       New Mexico Legislators

 

From:   Carter Bundy, AFSCME (505-463-8499)    

            Josh Anderson, AFSCME (505-350-2200)

 

Re:       FY '10 Budget and Revenue Issues

 

The mid-session revenue forecasts for FY '10, as you know, are terrible. State employees are aware of the current fiscal crisis and have already begun to share in the sacrifice of this economic downturn, agreeing to taking home less pay and enduring a hiring freeze just at the time when demand for state services are skyrocketing.

 

As you look to shore up the FY '10 budget, however, we ask that you not resort to furloughs or layoffs except as an absolute last resort. Both the House and Senate have shown great leadership in fiscal responsibility in FY '09 without cutting the very services that are in high demand right now.

 

Six years ago, the classified workforce stood at 19,200 employees. The state population has grown by about 10% in that period, but the classified workforce has only grown by just over 1%, to 19,440. Furloughs will cause the state to be even further short-staffed.

 

Furloughs effectively require the 19,440 classified state employees to contribute hundreds or thousands of dollars out of their own pocket to fix the budget. While our members are already sharing in the sacrifice, we believe that there are other solutions that should be explored first before asking for people making $20,000 or $30,000 a year to lose hundreds of dollars.

 

We believe that the federal stimulus will go a long way towards filling the hole that we face right now, but we need other, longer-term solutions to ensure that the programs that the legislature and administration believes in are funded and administered properly.

 

Revenue fixes

 

1. Combined reporting is the first and fairest revenue fix to end the shameful practice of large, interstate corporations hiding their New Mexico profits in states like Delaware and Nevada. Big companies like Wal-Mart pay far less in state taxes, as a percentage, than the legislature intends them to, by using an army of lawyers and accountants to make it look like their New Mexico profits are smaller than they really are.

 

Only two states west of the MississippiOklahoma and New Mexicoallow national and international companies to hide their profits. Particularly as all New Mexicans feel the squeeze of the current crisis, it's appropriate to end this loophole and ask that, at a minimum, companies doing business in New Mexico stop dodging taxes. The state Tax and Revenue Department estimates that combined reporting will generate about $70 million/year during a slump, and closer to $100 million/year once the economy rebounds.

 

2. Cigarette taxes in New Mexico are near the middle of the pack nationally, but there's no reason we shouldn't be near the top. We have high proportions of our population who receive some kind of government assistance with medical care, and cigarettes are a major contributor to those costs. An additional $1.00/pack would generate $26 million/year, while hopefully acting as a disincentive to young kids who have yet to start smoking.

 

3. Increase alcohol taxes. As with cigarette taxes, alcohol taxes have two major benefits: first, they're entirely voluntary, and second, they hopefully lead to fewer teens starting a habit that results in significant costs later in life. 

 

The general rule is that each extra penny in tax on beer, wine and alcohol generates about $7 million/year. Additionally, taxing alcoholic energy drinks as liquor rather than beer, even if the overall tax rates don't increase, generates $5 million/year.

 

4. Re-subject soda to the GRT. The removal of GRT from food was one of the New Mexico Legislature's proudest moments. Taxing food is exceptionally regressive. 

 

Having said that, each year science shows the deleterious effects of soda on youngsters. It is a leading driver of chronic illness like juvenile diabetes and obesity, each of which cost the state of New Mexico tens of millions of dollars a year. Unlike food and beverages generally, soda is a voluntary item of consumption.

 

A small increase in the price of soda will hopefully encourage some parents to look to healthier beverages instead, and will generate approximately $5 million/year in revenue that has been lost for several years.

 

5. End double tax deductions (PIT add-back). New Mexico is one of only five states in America allowing deductions for state and local taxes on both federal and state taxes. Eliminating the deduction for state tax itemizers stops this double deduction and is a progressive way to recoup tax revenues that will generate $60 million/year.

 

6. Decouple estate taxes from federal rules. While we don't know exactly what will happen to the estate tax in Washington, D.C., there's no reason for New Mexico's policy and revenue stream to be at the whim of Washington. Decoupling could add $20 million/year.

 

7. Increase the severance tax on oil and gas. New Mexico's citizens own the oil and natural gas under New Mexico ground. Many oil and natural gas companies are making record or near-record profits at a time when the rest of the state is suffering. While oil and gas are understandably powerful influences in our state, it's clear that New Mexico isn't getting fair market value for the oil and gas we own. The amount generated will obviously depend on the increase and on production, but this is something that can be done to help the budget without hurting our economy.

 

8. Add a 1% surcharge on personal income for those making over $150,000/year. When times were good earlier this decade, no one benefited more than wealthy New Mexicans, as the legislature and administration dropped the top marginal rate several points. Now that there is more of a need for revenue, a simple surtax for this very small group of the most fortunate taxpayers, even if temporary, would generate $64 million/year.

 

 

Carter Bundy

Political Action Representative

AFSCME International

1202 Pennsylvania St. NE

Albuquerque, NM 87110

(505) 266-2177 ext. 13 (work)

(505) 266-3155 (fax)