Will the Legislature enact beneficial tax reform or economy-killing paid leave (or both, neither)?

Many business leaders and advocates for New Mexico’s economic diversification (like us at the Rio Grande Foundation) are optimistic that the Legislature will finally repeal tax pyramiding of the GRT and remove the biggest single barrier to economic growth in New Mexico. Read an excellent opinion piece about HB 367 from several business leaders here.

But, the same Legislature that MAY give us GRT reform is the very same Legislature that MAY pass SB 11, an awful new paid leave mandate. The Albuquerque Journal editorializes against that here.

The primary issues WE have with the paid leave proposal are its complexity, especially the burden on small businesses. We have no idea if the tax increases levied on businesses or their workers (the bill contains both) will be enough to fund the open-ended benefit. And, finally, the proposal will certainly not help to improve New Mexico’s abysmal workforce participation rate.

The next few weeks (and perhaps the Gov.’s veto pen) will decide what happens on both of these big issues.