ALMOST EVERYTHING; BUSINESS GROUPS ARE PLEASED WITH THE WORK OF THE 2007 LEGISLATIVE SESSION
BYLINE: Copyright © 2007 Albuquerque Journal BY WINTHROP QUIGLEY Journal Staff Writer
New tax incentives, economic development funding and work-force training changes added up to another good legislative session for New Mexico's business community.
But state business group leaders say lawmakers still need to do more about ethics, water policy and tax pyramiding.
Ethics was one of the issues Gov. Bill Richardson wanted lawmakers to deal with in the special session he called to begin Tuesday. It was unclear whether any action would be taken.
Albuquerque Hispano Chamber of Commerce president Alex O. Romero called the regular session that ended Saturday "exceptional" and said a pro-business attitude seems to have become "institutionalized. There are a lot of champions of business in the Legislature."
Romero and Greater Albuquerque Chamber of Commerce president Terri L. Cole were especially pleased that a new work-force development department was created to centralize programs currently spread through a number of agencies.
"The focus goes back to the employers and what their needs are, and that's important," Romero said.
"It was a big win," Cole agreed.
Several bills that Cole estimated cut taxes by $80 million could encourage new business activity or maintain incentives enacted in earlier sessions.
The significant incentives included:
Gross receipts tax exemptions for financial management firms. The incentive is designed to encourage mutual funds and other investment business to develop in New Mexico.
"That's important because these jobs tend to be very high paying jobs and highly sought after," said Association of Commerce and Industry president John Carey.
Tax credits for so-called angel investments - relatively small, early-stage investments in startup companies made by individuals.
Tax credits for aircraft manufacturing and related companies to support continued development of an aircraft manufacturing cluster.
Credits for manufacturers of alternative energy technologies and for producers of alternative energy from sources such as biomass, wind and the sun.
Extension of credits for high-wage jobs and rural economic development.
There were tax disappointments as well, Cole said.
Business would have liked relief from gross receipts tax pyramiding and would like the top marginal tax rate reductions enacted in earlier sessions to be accelerated.
Taxes are said to pyramid when inputs to a production process or a service are taxed, then the final product or service is taxed again. The taxes compound, driving up the final price of the product.
The Legislature continued to fund state economic development programs. The Economic Development Partnership, which recruits businesses to New Mexico, received $1.455 million. A statewide jobs training program received $8 million. The state doubled the money available to help small communities promote themselves.
"I was pleased with the things we were able to kill that would have been bad for business," Cole said. The Legislature failed to enact a single-payer health care system; a bill that would have required businesses to spend a specific amount on health benefits for employees; and the compensating tax, which would have allowed the equivalent of a gross receipts tax on goods that businesses purchase out of state.
"Those three bills if passed would have been very bad for business," Cole said.
Small businesses were helped with new legislation allowing minority- and womenowned business preferences when competing for state business, Romero said.
The business leaders were pleased the statewide minimum wage passed in what Carey described as a way that was "probably amenable to most business people."
Santa Fe and Albuquerque had already enacted local minimum wage ordinances.
"I'm glad we're there," Romero said. "When you have different municipalities operating under different rules, it makes it difficult for the small-business owner and business in general."
Though the Legislature approved $45 million for water and wastewater projects, "that was really only a drop in the bucket toward addressing concerns and problems in that area," Cole said.
"We would have liked more on ethics," Carey said. "I think we made a good start, but there is some unfinished business there."