The State Budget as a Moral Contract

The State Budget as a Moral Contract

When considering the budget, we need see it as more than just a mandate on where state monies will come from and how they’ll be spent. The budget is a moral document, a way in which our government clearly expresses its values and priorities through what it funds or doesn’t fund.

Over the last few years, New Mexico has struggled with budget holes which have been plugged by slicing away at benefits and program funding from areas such as education, healthcare, and infrastructure. This year is no exception. Our state is once again mired deep in a budget crisis of overwhelming proportions. Legislators from both sides of the aisle are proposing various strategies to deal with the budget crisis, unfortunately with no clear resolution in sight at this point.

Here are a few of the most prominent budget bills currently making their way through the Round House:

HB202 requires internet merchants to pay Gross Receipts Tax on goods sold online to New Mexico residents. Currently, out-of-state online merchants have an unfair advantage over local brick-and-mortar businesses because while they are profiting by doing business in New Mexico, they are not contributing to our tax base. The fundamental issue here is tax fairness -- our economy can’t afford to continue missing out on important sources of tax revenue, especially now. What values are being expressed in this proposal? Is it the value of fairness? Is it the value of growing local business to grow the economy?

HB316 reduces funding to the New Mexico Medical Insurance Pool. It’s sponsored by Representative Paul C. Bandy and supported by Governor Susana Martinez. The House Business and Industry Committee made some minor amendments and gave it a Do Pass Without Recommendation. It’s moved to the House Health and Human Services Committee.

The Medical Insurance Pool is a state program that provides health coverage for people who are considered high-risk and are often unable to get coverage under other policies. According to the Office of the Superintendent of Insurance, the proposal would “save the state approximately $6 million in general funds, but will forgo $24M in matching funds.” Under this bill,some people will lose health insurance, and the rest of us are likely to see increased health insurance premiums. By cutting critical funding for those who most need health care, legislators will lose a critical federal funding match, and transfer the burden to New Mexicans. For each dollar spent by the state on health care, we receive $4 in federal funding.

Trip Jennings, in New Mexico In Depth, further examines the several implications of this bill. Without getting lost in the details, let’s step back and take a broader view. What is driving this proposal? Why would legislators throw away federal funding? What priorities rise to the surface? Do our legislators value saving money more than they value people’s health, lives, or the costs to individuals? Is this a reflection of our values? If legislators don’t hear from nonprofits and their constituents, then this bill will move forward unimpeded.

Section 96 of HB412, creates a Sales Tax on food, except for those receiving benefits through the federal Supplemental Nutrition Assistance Program (SNAP). Another attempt to tax food is SB416, a proposal that targets food with “minimal-to-no nutritional value.” Let’s tease these apart and consider the implications.

Not all low income families receive SNAP. If HB 412 is passed, anyone who cannot provide proof of SNAP benefits must pay tax on food. This disproportionately affects those who can least afford it. What’s the inherent message in this proposal? Is it that everyone needs to share the burden of the current financial crisis? Or perhaps it’s that balancing the budget is more important than people being able to feed themselves? Representative Carl Trujillo, the acting chairman of the House Taxation and Revenue Committee, said “It’s off the table because of the food tax,” meaning that it’s not a viable option due to the unfair nature of its content.

The tax on food with “minimal-to-no nutritional value” doesn’t sound so bad, at first. But as you read through the legislation, you see that this includes cake, pudding, ice cream, juice, and ice tea. If you’re wondering what’s so bad about that, let’s remember those low income families. What if your child isn’t feeling well and you want to give him or her some juice? Now it’s going to cost more. What if it’s your child’s birthday and you want to make or buy a birthday cake? Not only do you need to somehow stretch your money to pay for the cake, but the tax as well. What if you live in a food desert and the nearest place to buy food is a convenience store? Sometimes people buy junk food because it’s all they have access to or it’s all they can afford. This tax is an attempt to treat a symptom, instead of addressing the cause. The message behind this proposal is that people shouldn’t eat food with “minimal-to-no nutritional value.” The sponsors are placing a value judgement on the behavior of others, and limiting freedom of choice. Without a plan to ensure that people have access to nutritious, affordable alternatives, it’s unfair and unreasonable.

HB412 is sponsored by Rep. Jason Harper, Sen. John Arthur Smith, and Sen. Carlos Cisneros. It’s scheduled in House Taxation and Revenue Committee on March 3, 2017. A tax on food would affect all of us, but most especially those who are struggling to provide for themselves and their families. You can reach out to your Representative and Senator to let them know how this tax will affect your community.

SB416 is sponsored by Sen. George Munoz. It has been sent to the Senate Corporations and Transportation Committee. Consider contacting your Senator and asking for a comprehensive plan for addressing food security.

Paying attention to the state budget is important. Nonprofits need to understand the broader ramifications of legislation that is being put forth, including the very real impact that these laws have on our communities, either positively or negatively. We must ensure that these communities have a voice at the table, and remind our elected officials that our state budget is a moral contract between them and all New Mexicans. Above all, we must hold them accountable for the legislation they propose and the votes they take during the Legislative Session.

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