New Mexico Economic Development and Revenue Strategy
Summary of Recommendations: Take Opportunity to Act Now
To reduce the risk and uncertainty related to the potential significant outyear
budget gaps, New Mexico needs to act now to both reform its existing tax structure
and expand efforts to grow a more equitable and sustainable state economy. Tax reform
and economic expansion are both essential to fiscal health and economic prosperity.
◆ The State should consider a series of tax policy changes including:
•
Reforming the PIT rate structure and eliminating the capital gains PIT deduction
.
Reinstituting an estate tax
•
Increasing the motor fuel tax rate
•
Broadening the GRT tax base
Continuing to expand excise taxes.
The State should better align tax policy and economic development strategy by examining
the efficacy of current tax incentives.
The State should build on its efforts at economic diversification by increasing investments
in people and places, focusing on innovation, and explicitly considering likely revenue
impacts of economic development initiatives.
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