Food tax should remain dead and buried
Bad ideas in New Mexico don’t die. They are resurrected each December in anticipation of another session of the state Legislature.
The worst of the perennial proposals is taxing groceries. It’s back in the form of a trial balloon, one that should be burst with gusto.
Bill Fulginiti, executive director of the New Mexico Municipal League, for years has been lobbying legislators to reinstate the tax on groceries. He recently wrote a column outlining his organization’s stand.
“We advocate for an overall tax-rate reduction combined with a small local tax on food so that taxes generated by food purchases are returned to the community from which they were collected,” he wrote.
Fulginiti isn’t a villainous sort. He’s a bureaucrat with blinders.
Everybody has to buy groceries. The municipal league’s idea would harm people with the smallest incomes, those worrying about how they’re going to put food on the table.
I’ve been writing about proposals to tax groceries since my first newspaper job in the 1970s in Colorado. I covered a city where thousands of steelworkers were laid off during the weeks before Christmas.
Laid off was a euphemism. They would never return to their old jobs. The work they had done was being taken over by mills in Asia that paid their employees next to nothing.
With so many unemployed steelworkers, sales-tax revenue slumped. City administrators wanted to tax groceries to make up the difference.
I still remember the disdain of one City Council member as he heard a pitch to fatten the government treasury at the expense of people without jobs.
“You don’t tax food,” said the councilman, whose name was Isaac Duran. “City Hall doesn’t exist to hurt people.”
The time and place are different, but many who are part of governments in New Mexico still see a tax on groceries as a pipeline of fresh money.
State Rep. Jim Trujillo, D-Santa Fe, recently told me he believes New Mexico is losing substantial revenue because it doesn’t tax groceries. Trujillo gave the example of tourists buying food at Smith’s, then heading to parks or cabins to enjoy those tax-free items.
Surely the number of tourists who buy groceries for their outings cannot match the army of Trujillo’s constituents who are scratching out a living.
Santa Fe’s minimum wage is $11.40 an hour. That’s nearly $4 an hour higher than the statewide minimum wage. Still, the lowest-paid employees in Santa Fe only gross $456 a week, assuming they work 40 hours.
Many businesses in this service economy limit employees to part-time schedules. Fewer hours keep down costs.
In turn, workers bring home less money. Hit them with a tax on groceries and they have less food.
Fulginiti, though, blames New Mexico’s absence of a tax on groceries for government instability.
“When the Legislature removed food from the tax base, it unleashed a series of proposed fixes that only exacerbated problems,” he wrote in his column. “Today, [gross receipts tax] rates are more than 9 percent in some of New Mexico’s poorest communities, hurting the people the exemption was supposed to help.”
Anybody in government who claims to be concerned about exacerbating problems typically hasn’t solved any. This time is no different.
Fulginiti wants us to believe that governments would lower the overall gross receipts tax if only they could tax groceries. That would be his magic bullet to give government more money.
Instead of pressing for a tax on groceries, Fulginiti’s municipal league might examine the hundreds of other tax exemptions in New Mexico.
State legislators don’t know which ones help the economy and which bleed it dry because somebody with clout received a tax break.
Railroads, airlines, lottery retailers and even jockeys at racetracks receive exemptions. Yet Fulginiti and others in government want to tax groceries, perhaps because it really is low-hanging fruit.
Fred Nathan and his small staff at the policy organization Think New Mexico are encouraging mayors and city councilors to break from the municipal league by opposing the tax.
And the advocacy group New Mexico Voices for Children is distributing poll results that show overwhelming public opposition to reinstating a tax on groceries.
“New Mexicans believe their leaders should be fighting hunger, not making it worse,” said James Jimenez, executive director of the agency.
This is Christmas Eve, peak time for generosity. When the workweek returns to normal, Fulginiti and his cohorts won’t face any great difficulties. They will still be well-fed.
Not everyone in checkout lines at the grocery is so secure. They can’t afford lobbyists.
Ringside Seat is an opinion column about people, politics and news. Contact Milan Simonich at firstname.lastname@example.org or 505-986-3080.