Cutting Taxes in New Mexico While Schools Suffer Won’t Bring Prosperity
Today’s Albuquerque Journal includes an op-ed by CBPP Senior Fellow Michael Mazerov explaining that New Mexico could promote long-term prosperity much more effectively by adequately funding education than by cutting corporate taxes. Here’s the opening:
For the second time in a decade, New Mexico elected officials have succumbed to the siren song of tax cuts as the solution to the state’s economic woes.
In 2003, they adopted deep cuts in personal income and capital gains taxes that now cost roughly $500 million a year – money no longer available to invest in public services like education and health care.
One result? New Mexico has cut aid to higher education more deeply than any other state in the past five years, in terms of dollars of funding per student. And it has cut per-student aid to K-12 education more deeply than all but four other states.
And yet, despite the tax cuts, the state’s economic performance has barely improved.
A recent study by the Washington, D.C., based Center on Budget and Policy Priorities found that New Mexico’s share of nationwide employment grew by 0.02 percentage points between 2002 and 2011 – welcome, to be sure, but hardly worth the sacrifice of enough annual revenue to pay the starting salaries of 15,500 teachers.
Now the Legislature has given in to Gov. Susana Martinez’s push for a sharp cut in the corporate tax rate and another tax change that ultimately will enable major manufacturers to largely avoid corporate income tax altogether. . . .