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Civic engagement makes a difference
Stephanie Maez-Gibson
As the Legislature’s passage of Senate Bill 9 showed, civic engagement works, people will act, and it will make a difference. Though the governor vetoed the bill, rest assured that SB9 will be back next year.
It’s a truth that should be self-evident – but it cannot be restated often enough.
New Mexicans deserve transparency and accountability – especially when it comes to votes cast on vital issues by their elected lawmakers.
Typically, however, legislative decisions on complicated issues like tax policy fly under the radar of media scrutiny and public perception.
The last legislative session offers a perfect example with the historic effort to close that monstrous corporate tax loophole which allows out-of-state big box retailers to avoid paying income tax on the massive profits they earn in our state.
Tomás Garduño
The monstrous corporate tax loophole
To be clear, calling it historic is not a nod to hyperbole. The bill to eliminate this massive corporate tax giveaway (Senate Bill 9 – the Corporate Fair Tax Act) succeeded in passing both houses of the New Mexico Legislature this year after eight previous attempts over the last decade had met with failure. In fact, those prior bills usually failed because they were killed in the committee process.
Two committees in particular have proven to be a particular problem.
Tax reform bills must run what at times seem to be two impassable gauntlets – the Senate Corporations and Transportation and the House Business and Industry committees. And always, a phalanx of corporate lobbyists are posted at these gauntlets, standing guard to protect entrenched power and privilege. Their inordinate influence at the Roundhouse can make them into something akin to an extra-constitutional “third house” of the Legislature.
But this year was different. These obstacles were surmounted and the bill passed!
This was a landmark event and a time for celebration.
For this was the year legislators got the message from their constituents – a newly informed citizenry who understood the fundamental value at stake in this fight – that it was the value of basic fairness for New Mexico families and for our local businesses who had been placed at a competitive disadvantage.
Oh, and let’s not fail to mention that SB9 actually cut taxes for New Mexico business corporations and that it was a net job saver as well?
For every one job created by a big box retailer like Wal Mart, 1.4 jobs are lost to existing local businesses that downsize, according to a University of California-Irvine study.
Alas, the celebration was short-lived, for on March 6 SB9 crashed into the last redoubt of corporate power and influence – the Governor’s Office. On that day Governor Susana Martinez vetoed SB9.
Once again, New Mexico was left as one of the only remaining Western states to still permit itself to be taken advantage of by corporate greed.
What this means, of course, is that the fight for tax justice will go on a little longer.
Rest assured that the bill will be coming back in the 2013 legislative session.
Check your mailbox
And this is precisely why constituents of a number of New Mexico state legislators last week received post-session follow-up educational mailers that explain the fate of Senate Bill 9 and how their particular senator or representative voted on the bill, and encourage them to engage these lawmakers in a continued dialogue about tax policy and budget priorities.
New Mexico’s Center for Civic Policy (CCP) and the SouthWest Organizing Project (SWOP) have proudly partnered to produce these mailings. Our two organizations share a core mission that obligates us to educate the public about policy issues that impact their lives and to foster greater civic engagement with the policy-making process and elected officials.
This effort is part of our ongoing commitment to civic engagement.
Prior to the legislative session, CCP and SWOP distributed another set of educational mailers to the districts of legislators who sat on those key committees that would hear and vote on SB9.
To say that we were overwhelmed by the enthusiastic response to those pre-session mailers is an understatement.
Those mailers contributed to generating hundreds of constituent phone calls to legislators during the session. And those phone calls made a difference.
We learned an inspiring lesson. Civic engagement (aka democracy in action) works! Legislators responded. Senate Bill 9 passed.
Civic engagement works
Democracy is never easy. It requires eternal vigilance and careful attention. And a constant learning and re-learning.
Another lesson worth relearning is that we must never forget that most legislators are seriously well-intentioned individuals who do care about the common good. New Mexico’s unpaid citizen legislators make considerable sacrifice to serve.
Nevertheless, we cannot stress enough the importance of our lawmakers hearing from their folks back home on the issues that impact the everyday lives of working families – because if they don’t get that call, the only voice they will hear at the Roundhouse when it’s time to vote is that of the corporate lobbyist whispering in their ears.
The incentives to do the wrong thing are ever-present.
And sadly, herein lies another essential lesson.
All too often we see lawmakers succumb to lobbyist pressure (not to mention the inducement of campaign contributions). Thus, they take the easy way out. And it’s this go-along-to-get-along S.O.P that enables bad outcomes when it seems like nobody back home is really paying attention to the fuzzy policy details and that nobody really cares.
However, we’re pleased to report that people do care. And on the issue of the out-of-state, corporate tax loophole, polling released by the Green Chamber of Commerce shows that 70 percent of New Mexicans care a great deal!
The people just need accurate and complete information. And, above all, they need that spark of an idea that helps them realize that their participation can actually make a difference. Then they will act.
Maez-Gibson is chief executive officer at the Center for Civic Policy, and Garduño is co-director at the SouthWest Organizing Project.
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Concernednewmexican: sorry to be so slow… probably too late. I certainly don’t mean to challenge your state corporate income tax expertise and acumen, nor brag about mine as I don’t have much. You are correct in that there was a Wal-Mart court case here, and they lost. I was using Wal-Mart as allegory for all big-box operations, although the fight, on a national level, really was targeting Wal-Mart more specifically. Remember, these groups don’t have original thought and take their marching orders from their upstream affiliates/funders in DC and other places. Our court case here doesn’t set national policy for these groups, and they’re happy to go after the other retailters too to be sure. However, you’re omitting an even more notable case, K-Mart, which NM also won. Subsequently a couple of hundred companies settled with the state of NM. The point to your argument, as well as the K-Mart argument, is it’s established law already that you can’t do what the proponents are arguing everyone is doing ((the “monstrous corporate loophole”). Its already not legal under present law, as is well established in case law as you point out. While I’m not sure why you brought that up, as I don’t think it’s the point you were trying to make, I thank you for the help and am curious on your reaction to my point about term “monstrous”, and even more curious about who you think actually pays corporate income tax in New Mexico.
I’ll also acknolwedge your point about taxes and net profits. In the real worls, income tax refers to taxable net income (as opposed to gross income, which is total or gross receipts before any expenses), which are the “profits” you were describing They bonus themselves or give money to related organizations at the end of the tax year to create enough “expense” to avoid taxable income… if they’re taxable entities at all and not “charitites”, and then go back for more funding the next year. I bet you’d be really irate if one of those other corporations did that…
And speaking of civic engagement, the latest list I saw shows 12 unopposed Senate seats (29% of the Senate), and 26 unopposed House seats (37% of the House) in our state legislative races this year. Now that just shows how disenfranchised and disillusioned people are about our corrupt and incompetent state government. And we expect things will change in someone’s lifetime here? Ha!
concerned, you obviously live by the typical left wing double standard. There is no difference between the Schoepflin family pouring tons of money into left wing organizations to buy votes and influence legislation or the Koch brothers doing the same on the right wing. Both do not have to disclose their donations to charitable groups, and they even get a tax deduction from the 501 (c) 3 from the IRS. Both groups are multi-millionaires pouring money into political causes and agendas, no distinctions whatsoever, except left vs. right, and that is not important to the principle of shadowy money going into politics.
frustratedvoter: Apparently you know as little about the issue as you claim the authors do. Closing this loophole would not apply to Wal-Mart. That’s because the state Tax and Rev department already caught them at their creative accounting game, took them to court in 2006, and won a settlement against them after successfully proving that the mega retailer had been shifting New Mexico profits out of state in order to reduce its corporate income tax liability in New Mexico. The New Mexico Business Weekly did several good pieces on the case, which you can access on their website (http://www.bizjournals.com/albuquerque/). And you may find it ironic that nonprofits such as the CCP pay no corporate income tax, but you’d be wrong there, too. The corporate income tax should really be called the “corporate profit tax”—as profits are subject to tax, not income. Profits are income minus all allowable deductions (expenses). While nonprofits do have income, they do not have profits (hence the term “nonprofit”).
Dr. J: Really? You would describe as “shadowy” a foundation that works to raise public awareness and increase community participation? What, then, would you describe as transparent? One that seeks to obfuscate facts and encourages people to sit at home in front of the TV instead of thinking for themselves? Hmmm. That sounds like something the Koch brothers would fund!
I think the previous comentators cracked the code here. While the promoters of this idea did meet with more success with public engagment this year, it only proves the unfortunate reality that you can pursuade or “pressure” those to support things they don’t understand, even by those who don’t understand it themselves. Never in the public debate or in the propoganda used would you ever get the sense that the promoters understood what it was they were promoting. That’s ok, because the discussion isn’t about tax policy, it’s about organized labor trying to poke Wal-Mart with s stick, and they’re using their front organizations to do it (something that was proven out when the bill was narrowly targeted at “big box” stores… or at least some (Barnes & Noble was in, Best Buy was out… go figure).
You gotta love the hyperbole though. I’m still trying to figure out how you could plug a “monstrous corporate tax loophole” and still make the proposal revenue neutral by reducing the top rate by one tenth of one percent? Really? It sounds really scary at first, but I guess I have different idea of what “monstrous” means. Tellling also is the “every other western state does it” argument as a reason to adopt their proposal, but they never mention that every other western state has significantly lower corporate tax rates than we do. So do they really want our tax to look like our neighbors or not? If yes, be honest and forthcoming. If not, don’t use insincere arguments.
Business interests probably villlify the approach more than they should of course, but at least on a company by company case they’re typiically honest – if it makes a cost go up they don’t like it, if it goes down they do, and otherwise they can’t be bothered. People behave the same way. Still, I frind it ironic that organizations that are priivy to tax loopholes themselves (yes, the authors pay no corporate income tax whatsoever, it just doesn’t make their argument more pursuasive to mention that) will cast aspersions on those who actually do.
Excellent, the largest donor, a private shadowy foundation of course, is described thusly: ”Panta Rhea strives to create social change by researching and supporting a spectrum of organizations that seek long term solutions that raise public awareness and involve community participation while remaining committed to methods that are ecologically sound.”
Indeed, just as I said and thought.
Went to the website and I recognize a few of the funding sources….and yes they fund left-wing activity.
Here is a link from NM Politics identifying major contributors to Center for Civic Policy in 2007.
http://haussamen.blogspot.com/2008/08/center-for-civic-policy-releases-most.html
gm, I suspect these organizations are just the typical opaque, left wing pressure groups that exist to push liberals causes on legislators through lobbying and influence peddling, probably money too. I suspect they are funded by the same type people and organizations and foundations that fund all similar such left wing pressure groups. The Civic Policy group have a bare website, so we may never know anything about them. SWOP takes in over 3/4 million $, but of course they don’t say from who.
I’m curious as to who funds the Center for Civic Policy and the Southwest Organizing Project. Anyone know?