Local grocers don’t believe reinstating a food tax is the solution to solving a shortfall in state revenue.
The statewide food tax was abolished six years ago by New Mexico Legislature with Gov. Bill Richardson’s support.
But a 42-member task force appointed by Richardson in November appears to be leaning toward recommending reinstatement of the tax when the Legislature meets later this month. And, Sen. John Arthur Smith, D-Deming, chairman of the Senate Finance Committee, recently said he doesn’t think the Legislature will pass any tax increases — except perhaps on food.
“The tax could really hurt the customer,” said Randy Stansell, owner of Stansell’s Thriftway in Clovis.
Terri Cole, president and CEO of the Albuquerque Chamber of Commerce, has said her organization will push hard for reinstating the tax.
Cole recently told the governor’s task force she’d spoken with food banks and others and, “They tell me the tax break hasn’t really been that helpful to the very poor,” the Santa Fe New Mexican recently reported.
But Fred Nathan, director of the private think tank Think New Mexico is leading opposition to the tax along with Lt. Gov. Diane Denish.
Nathan estimates the tax would place an added burden of at least $250 a year on families already struggling to food on the table.
Denish, a candidate for governor this year, issued a press release Dec. 11 saying, “before legislators convene in January, they should send a clear message to New Mexicans that the food tax is off the table. We simply can not, in good conscience, support higher taxes on basic necessities at a time when so many families are struggling to get by.”
Stansell and other grocers say bringing the tax back would likely just cause problems for residents of Quay, Curry and Roosevelt counties.
“It won’t really hurt us,” Stansell said, noting customers will still have to buy food. But he’s concerned.
“It’s the lower economy families it will affect,” Stansell said.
Portales grocer Alan Hinton agrees.
“With the way the economy is they should not do it,” said Hinton, manager at Russell’s Super Save Discount Food. “It really would not help the customer.”
Reinstating the tax is estimated to raise an additional $228 million a year for the state treasury.
David Ayres, owner of Logan Food Market in Quay County, said he thinks if the state reintroduces the food tax, it will just spend the money and then come back looking for more.
“I am not real keen on these taxes,” Ayres said.
“Business will stay the same because people (have) to eat,” Ayres said.
Ayres noted when the Legislature approved the bill to end the food tax in 2004, the gross receipts taxes on many other items were increased to make up for lost revenue.
“They took the food tax away but raised the taxes on everything else,” Ayres said.
The New Mexico State Legislature begins its session Jan. 19.