New Mexico lawmakers seek accountability on tax incentives
SANTA FE, N.M. (AP) — New Mexico legislators want greater accountability regarding state grants and tax incentives for businesses that are designed to create jobs.
The push comes as the state ramps up financial support to a variety of industries from film production to hemp cultivation and art venues.
Proposed legislation filed by Democratic Rep. Bill Tallman of Albuquerque would require businesses that receive public support to provide the state with details about the number of related new full-time jobs, annual wages for those jobs and spending on local infrastructure.
The proposal holds implications for hundreds of businesses that receive more than $100 million in public incentives each year.
“Is it working? Are we getting our money’s worth? If you don’t do any accounting, you’re never going to know,” said Tallman, a retired city manager who worked at municipalities in the Northeast before settling in New Mexico. “Not every recipient is going to be a winner. That’s OK.”
The nonpartisan, Philadelphia-based Pew Charitable Trusts organization that analyzes the fiscal health of state governments lists New Mexico among more than a dozen states that fail to regularly evaluate economic development tax incentives. In 2019, Kansas and Montana added requirements for regular evaluations.
The proposed disclosures in New Mexico would be provided by businesses in an annual report, due each year for five years after receiving public support. Detailed information would be available to professional state economists for analysis — and kept largely off-limits to the general public under provisions designed to shield proprietary technical information and competitive business decisions.
The bill was endorsed by a committee on tax policy. It closely resembles a measure that stalled during the 2019 legislative session that ended in March. Lawmakers reconvene Jan. 21 for a 30-day session that focuses primarily on budget issues.
Among major new state investments in economic development, New Mexico set aside at least $60 million since mid-2018 for its fund that helps business relocate to New Mexico or expand local operations.
In early 2019, lawmakers raised the state’s annual $50 million limit on film production tax credits to $110 million and waived limits for companies such as Netflix that have signed long-term commitments to local filmmaking.
The state paid off a $130 million backlog in film production rebates in 2019.
It also expanded eligibility for its high-wage jobs tax credit and is likely to waive up to $10 million in annual taxes by 2023.
Economic Development Department spokesman Bruce Krasnow said Monday that the agency has not yet closely reviewed the bill but is generally supportive of efforts to track and monitor its programs while protecting proprietary and confidential information of taxpayers and businesses..