SANTA FE, NM (AP) The Senate approved a nearly $1.6 billion transportation package on Nov. 5 that will increase taxes on diesel fuel and raise motor vehicle registration fees.
The Senate’s 22-18 vote came after midnight as lawmakers tried to wrap up a special session of the Legislature called by Gov. Bill Richardson on taxes and sex crimes.
The highway measure would raise taxes and fees by approximately $59 million a year to help back bonds to pay for more than three dozen highway projects.
The legislation, which previously cleared the House, will head to the governor if the House agrees to several changes made by the Senate. The House was to meet after lawmakers hold a joint session to hear a speech by Mexican President Vicente Fox.
The Senate added provisions to limit fee increases on some extra heavy trucks that operate in New Mexico, encourage road contractors to hire state residents and force the state to issue oversize permits within 24 hours.
Richardson expressed support for the measure, describing it as a "very good bill."
"I think they’re reasonable fee increases,’"Richardson said of the tax and fee increases. "These trucks, out-of-state trucks, are damaging our highways. They’re welcome here but they should pay more.’
The governor and his allies contend the highway financing measure will boost the state’s economy by starting construction projects across the state that will provide several thousand jobs.
The tax package supported by Richardson quickly ran into trouble in the Senate, partly because it would have produced net tax increases of more than $130 million.
House Speaker Ben Lujan, D-Santa Fe, developed a highway financing proposal as a possible compromise to try to ensure the session didn’t end without the Legislature sending the Democratic governor at least some tax-related proposal.
Senate consideration of the highway financing proposal came four days after senators had abruptly adjourned because they couldn’t agree on a tax package.
When the session began, Richardson had wanted lawmakers to approve a tax package that would have provided $74 million for highways and transportation and an additional $61 million for the state’s main budget account. Among its provisions was a 5-cents-a-gallon increase in the tax on diesel.
With the tax issue stalled in the Senate, Lujan pushed ahead with a scaled-back tax proposal that focused on financing the governor’s highway and transportation plan called "G.R.I.P. –– Governor Richardson’s Investment Partnership.’
The House approved the measure on Saturday on a 35-30 vote, with five Democrats and 25 Republicans opposing it.
The legislation provides for long-term bonding –– up to 20 years –– and that approach will require $4 billion in interest and principal payments for the proposed highway projects. Large debt payments in the future, critics say, could potentially force cutbacks in some operations of the state transportation department.
Sen. Timothy Jennings, a Roswell Democrat who opposed the bill, said the state should adopt a "pay as you go" approach to roads and other programs. The long-term bond financing –– combined with tax cuts approved earlier in the year and a constitutional change to dig deeper into a state permanent fund –– will create debts and budget problems for future New Mexicans, he said.
"Look at what you’re doing to the children," said Jennings. "For every child born today, these bonds probably won’t be paid off until they’re drinking in a bar –– 20 years from now."
Opponents also said the tax and fee increases would hurt in-state trucking operations. However, supporters said it had been many years since registration and trucking fees had been increased and that New Mexico could continue to rank low compared to most neighboring states.
During debate, the Senate rejected a GOP-backed proposal by Sen. Joseph Carraro, R-Albuquerque, to refinance existing highway bonds to raise nearly $800 million for new road projects without raising taxes and fees.