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Last week, Governor Martinez announced that she was willing to sign legislation reimposing the food tax, as long as it was part of a comprehensive “tax reform” bill. This is a surprise to us since the Governor has long opposed a tax on food. A regressive tax on a necessity like food does not belong in a “tax reform” bill. Thirty-four states, including our neighbors of Arizona, Colorado, and Texas, balance their budgets without taxing food.
The governor and legislative leaders have a week to reach an agreement on the budget and tax bills before the special session begins on May 24.
Please join us in urging Governor Martinez to reject any deal that includes the reimposition of the food tax. While some legislative leaders have expressed their opposition to the food tax, we have learned the hard way that anything can happen during the chaos of a legislative session. As you may recall, the food tax was rolled into a larger tax package late in the evening on the final night of the session in 2013, and our allies were barely able to get it removed before the bill passed in the final seconds of that year’s session.
Please, please, please take a moment to email Governor Martinez as she weighs different budget options and ask her to take the food tax off the table. Go to www.governor.state.nm.us/Contact_the_Governor. Thank you!
Please see below the “My View” I submitted to The Santa Fe New Mexican prior to the 2017 legislative session.
Taxing Food Is a Cruel Place for New Mexico to Find Revenue
By Sherry Hooper, The Food Depot
As the Executive Director of a regional food bank, I am bewildered by the fact that a legislative committee kicked off the holiday season by considering a proposal that would harm the most vulnerable New Mexicans: bringing back the food tax.
Thousands of New Mexico families live paycheck to paycheck and struggle to put food on the table. Approximately 20 percent of New Mexicans have incomes below the federal poverty level ($24,300 for a family of four), the second highest rate of all states.
Food banks, shelters, and soup kitchens across the state are stretched to the breaking point trying to bridge the gap for these families and keep their children from going to bed hungry. A food tax would make our job even harder.
Quite simply: if the food tax is reimposed, New Mexicans who now either barely afford sufficient food every day, or who can’t even manage that, will not have enough to eat. To families with ample resources, a food tax may seem inconsequential. But the many New Mexicans already struggling will have to make painful choices between buying groceries, filling their prescriptions, or keeping the lights on.
The legislators who have proposed bringing back the food tax have two “fixes” that they claim will protect families. Both are inadequate.
First, the legislators proposed to exempt the food purchases of any New Mexican who qualifies for food stamps (now called SNAP, the Supplemental Food Assistance Program) from the new tax. However, about one in four New Mexico families who is eligible for SNAP benefits do not receive them, either because they choose not to apply for public assistance, are overwhelmed by the bureaucracy, or do not know that they qualify. As a result, more than 140,000 New Mexicans living in poverty would be taxed on their food purchased – along with the thousands of low-income New Mexicans who earn more than 130% of the federal poverty line ($34,000 for a family of four) and who are not eligible for food stamp relief.
The second idea that legislators are proposing to lighten the heavy burden of the food tax is an increase in the Low-Income Comprehensive Tax Rebate (LICTR), a tax credit that low-income families can receive on their income taxes. Unfortunately, the proposed increase is nowhere near enough to make a real difference: a family of three earning $28,500 would go from receiving $25 in annual LICTR relief to $37. Meanwhile, the food tax would take many multiples of that amount out of their pockets. LICTR comes with the added challenges that families must file income taxes to receive it, and some families that earn too little to be required to pay taxes do not file. In addition, LICTR payments are often reduced by unscrupulous tax preparers who offer “rapid refund” loans in exchange for a large portion of the rebate.
What do other states do? According to the Federation of Tax Administrators, 34 states completely exempt food from taxation, including our neighboring states of Arizona, Colorado, and Texas. A state obviously can balance its budget without revenue from a food tax – because almost all of them already do.
A food tax is not New Mexico’s only option to balance its budget but it is one of the most hurtful. New Mexicans want to help, not harm, their friends and neighbors who are financially strapped. It is especially cruel for the legislature to be proposing a food tax in this season when we emphasize helping our fellow men, women, and children. We urge Speaker Egolf, Senate Majority Leader Wirth, and the rest of the Santa Fe delegation to reject this regressive idea.
We must not increase hunger in our state. New Mexico is better than that!