Today, at a lunch meeting with over 200 small business owners and leaders, Governor Susana Martinez signed SB 32 into law, which provides $81 million worth of temporary tax relief to small businesses throughout New Mexico in 2012.
"As New Mexico job creators are working to get our economy back on track and hire new workers, it's vital that we provide this temporary tax relief to ensure that we're not putting barriers in the way of job creation," said Governor Martinez. "Working in a bipartisan fashion with Sen. John Arthur Smith and others, I am encouraged that we passed a significant amount of tax reform and tax relief for small businesses during this past session."
Last month, the Governor signed legislation that will provide significant tax relief to the state's construction and manufacturing sectors by curbing the practice of "pyramiding" -- the doubleand triple-taxation of certain goods and services that contribute to a final product. The legislature also approved the Governor's proposal to provide a tax credit of up to $1,000 to New Mexico businesses when they hire a veteran who has returned from service in Iraq or Afghanistan. All proposals enjoyed broad bi-partisan support.
New Mexico businesses had been facing a substantial rate increase (to a level 3 rate schedule) as a result of unemployment legislation passed by the House and Senate during the 2011 legislation session that was upheld by the Supreme Court. SB 32 prevents this burden from being imposed on New Mexico job creators this year (maintaining a level 1 rate schedule in 2012 and moving to
a level 2 rate schedule in 2013), providing $81 million in temporary tax relief in 2012 and additional relief in 2013. During this time period, the unemployment council provided for in state law and activated by Governor Martinez through an executive order in November 2011 will work to craft recommendations that ensure the fund's long-term stability and solvency through a more equitable, predictable rate schedule by which businesses contribute to the state's unemployment insurance fund.
Governor Martinez's goal is for future fluctuations in the fund to be determined by actuarial and economic conditions - not the votes of politicians in Santa Fe, and for rate changes to be gradual and guided by experts on the unemployment council so that the fund truly operates as an insurance mechanism for businesses.