For: Lisa Cacari Stone
By: Seth W. Heath
Class: Pol Sc 270: Public policy analysis and administration
Date due: 09/03/2002
The number of the bill that I chose to examine is Senate Bill 148 (SB 148)
The sponsor of SB 148 is State Senator Manny M. Aragon.
The majority of this bill goes into effect on July 01, 2002. If it had an emergency clause it would go into effect as soon as the Governor signed it. This bill is not an emergency.
According
to: http://www.legis.state.nm.us/session02.asp?chamber=S&type=++&number=148&Submit=Search
the title of this bill is “Phased in food gross receipts tax credit.”
SB 148 seeks to provide a credit against the state food gross receipts tax and to compensate for lost revenue by increasing the cigarette tax. It also re-appropriates the manner in which taxes are redistributed.
The strengths are that the bill would reduce the cost of food to the consumer. This would serve as an equalizing factor in the wage differential between the richer and poorer classes of society. In some markets this would encourage shoppers to keep their dollar in the state instead of finding cheaper groceries outside of the state. Problems with this bill might be a revenue deficit in future years once the food gross receipts credit and cigarette tax are fully instituted. Statistics show that the population of smokers has been decreasing in recent years, be it through attrition or less smoking. Once this bill is in full effect, in FY04, if cigarette smoking continues decrease there will be a revenue shortfall for the state. Another problem is that the bill targets one group (smokers) for a tax, this can be viewed as discriminatory.
The bill seeks to address food taxes and cigarette smoking.
The bill proposes to provide relief from taxes on food. Since it is essential that people have food it seems equitable that the taxes for food be lower than on those of luxury items. By raising taxes on cigarettes and providing more money for cancer research this hopefully reduce the burden on the public healthcare system.
The state and the country were in an economic downturn. The stock market had collapsed and unemployment was increasing. By providing relief from taxes on an item such as food the state was seeking to lessen the impact of hard economic times. By increasing the tax on a luxury items such as cigarettes the state would ideally discourage smoking, and if not provide increased revenues.
I really don’t see any reason for either party to be fundamentally opposed to this bill. I think that if special interest groups or political relationships between various legislators were involved then we would see some opposition or attempts to amend the bill.
It is distributive in that it is providing tax credits to certain people thus affecting distribution of resources. It is re-distributive since it takes money from cigarette taxes and gives them to other entities.
The Committees’ Committee found the bill to be germane and sent it to the Senate Public Affairs Committee on 01/21/02. The Senate Public Affairs Committee gave SB 148 a Do Pass recommendation and referred to the Senate Finance Committee on 01/26/02. The Senate Finance Committee gave SB 148 as amended a Do Pass on a 5-4 vote. It passed the Senate on a 35-4 vote. The House Government and Urban Affairs Committee referred SB 148 to House Business and Industry Committee Without Recommendation on 02/09/02. The House Taxation and Revenue Committee gave HB 410, 447 and SB 148 a Do Not Pass and substituted them with House Taxation and Revenue Committee Substitute for HB 410, 447 and SB 148, which they gave a Do Pass on 02/12/02.