NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

The bill would authorize a one-time tax credit to all taxpayers in New Mexico from savings realized by the Johnson Administration. The bill presents three areas where savings were projected:

• •$40,000.0 by housing inmates in private prisons
• •$100,000 on medicaid for first year of managed care
• •$89,000 on highway warranty for State Highway 44

Total of these savings components is $229,000.0.

FISCAL IMPLICATIONS

TRD reflects recurring general fund revenue loss of $215,00.0 in FY 01 and $226,000.0 for a full year. The Department notes this is equal to decreasing all income tax rates by 25 percent.

OTHER SUBSTANTIVE ISSUES

TRD notes the amount of the tax credit is not a function of actual savings realized.

TRD assumes the credit is non-refundable, i.e. only available to New Mexicans with positive income tax liability. Individuals with zero or negative income tax liability would not be eligible for the credit.

Non-residents with positive tax liabilities would be eligible for the credit.

AW/gm