Over the past few years New Mexico has used short-term solutions to balance the budget without raising taxes. But if oil and gas prices stay low, it will become more and more of a challenge to find the money the state needs to pay the bills.
Raising at least some taxes might not be politically popular, but Sen. John Arthur Smith, chairman of the Senate Finance Committee, argues it’s the fiscally conservative thing to do. And he wants to start with the gas tax.
In New Mexico money from taxes on gasoline and diesel (along with a few other things) goes into a road fund that pays for road maintenance.
But the tax hasn’t been raised since 1993. That leaves New Mexico, the fifth-largest state by area, with the seventh-lowest gas tax rate in the country. Less revenue money for the roads because of inflation, and because many people are driving more fuel-efficient cars or simply driving less.
Beat-up roads cost drivers almost $2 billion dollars a year in repairs, delays and crash damages, according to a new report from TRIP, a transportation research group. And New Mexico isn’t setting aside enough money to fix those roads, the report said.
But raising the tax has been a political problem.
“When bills like that are introduced, people get squeamish,” said Rep. Patty Lundstrom, D-Gallup, who serves on a House transportation committee.
Gas prices are the lowest they’ve been in seven years, since the depth of the Great Recession. Filling up today costs less than half of what drivers paid a year ago.
But while the price of gas goes up and down, New Mexico’s gax tax hasn’t changed in decades. That means we have less money coming in, while it’s costing more to build and fix the roads. Today, a quarter of the roads in the state are in poor condition, according to TRIP.
“A dollar of gasoline tax in 1995 bought a dollar of road. Today it buys 56 cents,” said Sen. John Arthur Smith, D-Deming.
Smith has sponsored proposals to raise the tax for several years and he tried again this year, saying it’s only fair for the people who drive the most – and buy the most gas - to pay the most to fix the roads. And now is the time.
It’s better to do it when the price of gasoline is at a dollar-and-a-half versus four dollars,” Smith said.
But Gov. Martinez, who campaigned on not raising taxes, wouldn’t agree to add his proposal to the agenda this session. And Smith wasn’t able to get enough support from other state lawmakers to force the issue.
“We’ve done surveys, polls to ask citizens if the money were specifically earmarked for this purpose would you support it, and overwhelmingly people support [raising the gas tax],” Rep. Lundstrom said, and interviews with voters at the Roundhouse this session showed similar results.
“I drive about 800 miles a week, but I would be willing to pay more for gas,” said Carl Slater, who lives in Gallup and works on the Navajo Nation.
Hoskie Largo is from Prewitt, a small community about 20 miles northwest of Grants. He said the highways are in OK shape, but other roads need work, too.
“They really have a priority on I-40, but it would be [great] to maintain or fix other roads,” he said. Largo balked at paying Sen. Smith’s proposed 4 cent increase but figured he’d be willing to pay 3 cents more.
So why won’t lawmakers vote to raise the tax? Rep. Sharon Clahchischilliage is torn. She’s a Republican who represents an area between Farmington and the Navajo Nation.
“It’s kind of a double-edged sword for me because yes, we’d love the money for roads, …but …a lot of my constituents are really happy that the gas prices are low,” she said.
Her district badly needs road upgrades, but if she voted to raise the gas tax, there’s be no guarantee that a significant amount of the increased revenue would fund projects in her area. And she’d have to vote against her party.
As a rare Republican in a largely Democratic part of the state, Clahchischilliage said she’d be willing to buck the party line—but that she’d undoubtedly face withering negative ads for it.
“Just look at the poverty rate of District 4 and there’s your answer about raising taxes. … You ought to see what’s being run about me currently on the radio, on Navajo radio,” she said.
Lundstrom agreed. “In this political climate there’s so much mudslinging that these things get blown way out of proportion,” she said. “It’s incredible to see the amount of money that’s spent on these races, the kind of money that people are willing to spend against you.”
Still, other states have raised gas taxes successfully. Wyoming, a western state with a lot of roads, that’s controlled by Republicans, raised its gas tax by 10 cents per gallon in 2013.
“That’s what those tax programs are actually in place for. To fix our roads,” said Richard Anklam, the executive director of the New Mexico Tax Research Institute.
And when there’s not enough money in the road funds, raising the tax that feeds the fund seems to make sense.
“The fiscal conservatives, they can do math. You need five dollars, but you have four, so what do you do?” Anklam asked. “It’s not impossible, it’s just the timing has to be right for people to decide that it’s worth the political capital or the pain.”
It was 1988 when former President George H.W. Bush told the Republican National Convention, “Read my lips: No new taxes.” And it was two years later that he faced the ire of his party for compromising with the Democrat-controlled Congress on a budget that included some tax increases.
In 1992 Bush's Democratic opponent in the presidential race, Bill Clinton, hammered Bush over the issue, saying he was a man who couldn't keep his word. Bush lost.
Gov. Martinez, who many say has national ambitions, has pledged repeatedly to balance the budget without raising taxes. And she has not backed down.
This year every New Mexico state lawmaker is up for reelection. With so much more money fueling negative ad campaigns, few elected officials dare to risk being attacked for making voters pay more at the pump.
Increasing the gas tax in order to bring in enough money to do all the repairs drivers need may make perfect sense, Anklam said, “The downside is… there’s a visceral political reaction to that.”
That visceral reaction is still fresh in the minds of many New Mexico politicians. The last time New Mexico raised its gas tax, in 1993, Gov. Bruce King signed it into law.
In the 1994 election, his Republican opponent, Gary Johnson, attacked King fiercely for raising taxes. King lost.
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