LEGISLATIVE ROUNDUP: The House Public Safety Package

A LOOK AT WHAT’S IN, AND WHAT’S NOT IN,
THE HOUSE PUBLIC SAFETY PACKAGE

House Bill 8, the “public safety package” was approved Wednesday and will likely be before the House either tomorrow or Saturday. It has some good things in it, like reforming the criminal competency laws, cracking down on auto theft and adding a three-year enhancement to sentences for drug trafficking. Here’s the complete list of bills that make up what’s in HB 8:

1. A major overhaul of the criminal competency statute aimed at institutionalizing the truly violent criminals and placing others in behavioral health programs, including court-ordered treatment, if necessary.
2. Creation of the crime of unlawful possession of a weapon conversion device that can convert a semiautomatic weapon into a fully automatic weapon. The devices are commonly known as “Glock switches.”
3. An increase in the penalty for making a shooting threat to the same level as making a bomb threat.
4. Enhancement of drug-trafficking sentences by up to three years if fentanyl is involved in trafficking.
5. Increasing blood testing when there is probable cause that an individual is driving under the influence of intoxicating substances of any kind. Does not include cannabis at this time as there is not a reliable test yet.
6. Increased penalties for different forms of auto theft. A person could be guilty of a fourth-degree felony for a first offense, a third-degree felony for a second offense, and a second-degree felony for a third or subsequent offense.

Some good things, but if that’s all that was done in this session about fighting crime, would you come away saying, “Wow, I really feel safer.”? We don’t think so.

The fact that we have a public safety bill at all is because the governor called a special session and has shined a bright light on making our communities safer as soon as possible. So, good for you, governor. That should be everyone’s common goal, and it takes an “all-of-the-above” approach – tougher penalties for egregious crimes, rebuilding the behavioral health system and slamming the revolving door shut. The session is only half over – there’s plenty of time to add critical but so far missing pieces. Here are our top five recommendations:

1. Juvenile justice reform – serious violent crimes committed by youthful offenders is the fastest growing category in our communities. We must find a way to take violent offenders off our streets. Murder is murder regardless of age. It’s serious, and we need to treat it seriously.
2. Racketeering – the scope of crimes that can be prosecuted using racketeering laws in New Mexico is very narrow. We need to add many additional crimes to break human trafficking, drug dealing and other organized crimes.
3. Felons using firearms – substantially increase sentences for convicted felons who commit subsequent crimes using a firearm.
4. Increased penalty for drug trafficking resulting in death – impose second-degree felony penalties for this crime and first-degree sentences if the death of a minor is committed.
5. Pretrial detention – require that felons who have committed a subsequent violent crime be held in custody pending trial and not be released back into the community.

These are our top five, but there’s even more that could – and should – be done. This is the session to truly make us safer. Our legislators should not leave Santa Fe until the job is done.

HOUSE LABOR OKS MINIMUM-WAGE HIKES

This afternoon, the House Labor, Veterans and Military Affairs Committee heard, and approved, two bills that will raise the minimum wage in New Mexico that have far-reaching, unintended and negative effects. Both are sponsored by Rep. Patricia Roybal Caballero (D- Bernalillo), and both are opposed by the Greater Albuquerque Chamber of Commerce.

Increase to $17 an hour for all employees

The furthest-reaching bill, House Bill 246, would increase the state’s minimum wage to $17 per hour beginning Jan. 1, 2026; eliminate the tipped minimum wage and tip credits, requiring employers instead to pay tipped employees at least the new minimum wage with no reliance on tipped credits; annually adjust the state’s minimum wage using the consumer price index; repeal exemptions from the definition of “employees” including registered apprentices, seasonal employees and certain agricultural workers.

An amendment to include all workers in the increase passed 6-3.

J.D. Bullington testified for the Chamber that the increase amounts to a shocking 42% jump in labor costs while margins in restaurants are almost always in single digits, making this simply unaffordable.

We’d point out that just two years ago, New Mexico increased its hourly minimum wage to $12. HB 246 will increase that exponentially to $17 and toss in all tipped employees, apprentices, seasonal employees and agricultural workers to boot. And there’s that annual increase based on the Consumer Price Index that ignores what the economy is doing. If you think $1 up-charges for items with eggs is hard for consumers to swallow, add this and watch them stay home in droves.

The Chamber’s concerns are the same as in 2023: When labor rates aren’t affordable, businesses have three choices:

1. Go somewhere else
2. Replace people with machines
3. Reduce employee hours or cut positions.

Let’s be clear: Small businesses, the backbone of our private sector, are usually relegated to the third option. Instead of bringing more people into the workforce, HB 246 promises to put unmanageable financial burdens on our small businesses, reduce the number of jobs available and make goods and service less affordable to all New Mexicans. That’s a trifecta nobody needs.

Among the many joining the Chamber in opposition were:

Bill Lee, president and CEO of the Gallup McKinley County Chamber, who said those who will suffer most under HB 246 will be those seeking gainful employment and experience in the job market, and increased prices will negate any wage increase.

Carol Wight, CEO of the New Mexico Restaurant Association, which represents 3,600 restaurants in New Mexico. She provided the shocking statistic that a small restaurant with 20 full-time employees will have an unabsorbable annual increase of $395,000 to its payroll.

Deborah Douds, executive director and CEO of the Ruidoso Valley Chamber of Commerce, who shared businesses there are still struggling after fires and floods last year and this increase will be the final straw, closing doors and eliminating jobs.

David Galloway, a 27-year-old newly married New Mexican, who said he is feeling the weight of rising costs and this will drive them up more, and the idea that someone with no experience could make what he makes now after years of hard work “is downright offensive.”

Larry Sonntag of the New Mexico Business Coalition, who said the bill will increase expenses, and higher wages won’t stretch further as cost of essentials, such as food and housing, also climb.

Bridget Dixson, president and CEO of the Santa Fe Chamber of Commerce, who said the bill will place immense financial strain on small business, especially those in the restaurant and hospitality area. “This isn’t a policy change, it’s a breaking point.”

Angie Smith, whose friend runs the Courthouse Café in Portales and already is not taking profit for herself as she struggles to keep her doors open for her employees. She shared there are already not enough jobs there and “this will have a devastating effect on our community.”

• A restaurant owner with 171 employees who fears the unintended consequences of raising prices and closing doors. He added that his employees make well over $17 an hour with tips.
• The New Mexico Chile Association, which said farmers, processors and consumers will feel the burden.
• A rancher from Stanley on behalf of the New Mexico Cattle Growers Association who called it an “attack on agriculture.”
• CARC, a Medicaid provider in Carlsbad, which said the minimum increase they face will be $176,000 annually, and they will have to either close some homes, cancel programs or go out of business.
• The National Federation of Independent Business, which said one-size-fits-all does not work for New Mexico and because the CPI has no cap, there could be 6% increases annually.
• Jerry Schalow, president and CEO of the Rio Rancho Chamber of Commerce, who said local businesses already operate on thin profit margins and will have to reduce staff, raise prices or close, leading to higher unemployment rates. He said look no further for the effect of higher minimum wages than the fact a Big Mac combo is $5 more in Santa Fe than Clovis.
• Kelly Fajardo, representing the New Mexico Farm and Livestock Bureau, who said this will place an enormous strain on small farms across New Mexico.
• The New Mexico Chamber of Commerce, which said that when labor costs rise, jobs and hours are cut, hurting workers, especially in small and rural communities.
• A man who now works in restaurant management but was a tipped server and bartender for years. He said that in Seattle, a similar increase resulted in job cuts, with some restaurants now having no hosts, no busers and sometimes no servers.
• The New Mexico Healthcare Association and New Mexico Center for Assisted Living, which raised the concern of the impact on those businesses that rely heavily on Medicaid.

Supporters were primarily employees and advocates of low-income residents who advocated for a living wage.

Rep. Luis M. Terrazas (R-Catron, Grant & Hidalgo) said he doesn’t like this type of bill because “what it does is put everybody at odds.” He decried its size and massive impact, said it actually cuts the pay of tipped workers, and that it will increase inflation while punishing those who have put their entire lives into their businesses. Only 19 states have a higher minimum wage, he added, and if the bill passes, the state will have increased the minimum wage by 230% since 2019.

“We’re making slaves out of our business people. We’re making them slaves to their own businesses because they can’t afford the cost of living, and the cost of doing business is high.”

-Rep. Luis M. Terrazas

Roybal Caballero, a community economic developer, said it is a matter of pride for our state to take such a huge step forward to break the cycle of poverty, and businesses that would stay away because of the $17 minimum wage are looking for “a cheap labor force” and are not the kind of companies she wants here.

Ultimately, the committee voted 6-4 to give the bill a “do-pass.” It’s headed to House Appropriations and Finance.

Increase to $15 an hour for state and higher education employees

The committee also heard House Bill 264, Minimum Wage, Institutions of Higher Learning. J.D. Bullington again testified for the Chamber in opposition, saying the increase tied to the CPI puts the state in a bad place in the event of another economic downturn, and the mandated 12 weeks of paid family medical leave for parents of a new child is way out in front of House Bill 11:

“The Chamber believes that these types of salary increases should not be tied to inflationary measure like automatic COLA increases, and the Legislature should revisit increases in state employee salaries with caution and care and keep them isolated from other employee benefit programs.”

Supporters testifying today included members of various unions and state employees, who said they cannot afford necessities including housing in Santa Fe, their responsibilities far outstrip their salaries, that many of their colleagues have left their jobs and the state for better pay elsewhere, and that the state is not competitive regarding annual leave. HB 264 also directs state agencies to implement a remote work program ‘to enhance recruitment and retention of a diverse workforce from rural areas of New Mexico.’ ”

Roybal Caballero said the state is dealing with vacancy rates around 20-25%, that 36% of new employees don’t complete their first year on the job, and turnover cost the state around $42k per employee – in 2021 the 2,121 employee turnover cost over $90 million.

Terrazas offered the only debate. He had the sponsor and her experts confirm no state worker should be making less than $15 now, and he questioned why vacancy savings aren’t being used to provide raises for employees to reward and retain them. He also said he has “heartburn” over remote work given all the challenges experienced with it during the COVID-19 pandemic and asked if that could be removed.

Roybal Caballero said remote work is an integral part of her bill.

HB 264 received a unanimous “do-pass” on a bipartisan 9-0 vote. It’s also headed to House Appropriations and Finance. We’ll be there to keep you informed on what happens with these misguided and damaging bills.

BILL SUPPORTING CRIME VICTIMS BEING REVISED

Victims of crime took center stage in the House Consumer and Public Affairs committee this morning.

Rep. Dayan Hochman-Vigil (D-Bernalillo) presented HB 190, Victim of Crime Act Changes. The bill makes changes to the existing Victims of Crime Act, which ensures that those affected by violent crime are treated with dignity, respect and sensitivity at all stages of the criminal justice process.

The act lists the crimes that qualify someone for protection. HB 190 adds victims of human trafficking to the list, along with health care workers who are battered or assaulted in the course of their duties. It also provides enforcement mechanisms to ensure victims’ rights are protected. This means that if a victim’s rights are not complied with, they may have the ability to sue the entity that violated their rights, whether that’s the courts or the prosecutor.

New Mexico Attorney General Raúl Torrez supports the effort and held a press conference last October announcing the proposed legislation. At the time he said,

“Victims deserve to be at the forefront of our judicial system, and this legislation is a critical step toward ensuring their rights and safety are prioritized. For too long, our system has focused on the rights of the accused, while victims and their families have been left behind. It’s time to change that and put victims first by providing them with the protection and support they deserve.”

Enrique C. Knell presented the Chamber’s full support of the bill, saying, “First of all, we agree with Attorney General Raúl Torrez when he says that victims should be at the forefront of our judicial system. We are also especially supportive of adding health care workers to the group of workers protected by the act, as well as victims of human trafficking. Both are groups of people that we should zealously protect.”

The only opposition to strengthening victims’ rights came from the public defender’s office.

Hochman Vigil says we have seen systemic violations of victim’s rights in New Mexico, to make statements and to face the perpetrator at the time of certain hearings. Court officials or DA’s offices were failing to provide notice to victims about upcoming hearings.

Several legislators did express some concerns with the need for clear procedural guidelines. Rep. Andrea Romero (D-Santa Fe) said she’d like to see more specificity in the bill with regard to processes. Rep. Stefani Lord (Bernalillo & Torrance) says she’s inclined to support the bill but needs to understand it better.

Hochman Vigil ultimately asked for more time to address concerns from the panel and said she will return to the committee with amendments. The bill was rolled over, and no vote was taken.

WHO’LL FOOT BILL TO HELP SMALL BIZ?

This afternoon, the Senate Tax, Business and Transportation Committee considered SB 141 sponsored by Senate Majority Leader Peter Wirth (D-Santa Fe) and temporarily tabled the bill pending development of an overall tax package. The principal goal that Wirth is after is trying to level the playing field between small businesses in New Mexico and out-of-state companies. Out-of-staters don’t pay GRT on the first $100,000 of gross receipts, whereas local businesses do. Wirth’s idea is to give New Mexico companies a $100,000 GRT deduction. The rub? It’ll cost state and local governments over $300 million in lost revenue per year. The solution? Raise corporate income taxes to offset the loss.

And that’s where the Chamber parted ways with the bill. We firmly oppose any tax increases, as J.D Bulllington explained:

“The basis of our concern is that this bill increases corporate income tax. While an attempt is made to help our small businesses, the bill unnecessarily raises taxes on some of our largest employers and revenue-generators like oil and gas and manufacturing.

“The Chamber has long advocated for GRT relief and, with the state treasury overflowing with cash, there’s no reason why all New Mexicans shouldn’t have tax relief paid out of the surplus. Lowering the GRT rate is a simple, across-the-board move that would contribute to lowering the prices of goods and services for all families. We would urge a ‘yes’ vote to tax reductions but a ‘no’ vote on SB 141.”

Wirth pointed out that even small rate reductions in the GRT cost the treasury a lot of money and, in his opinion, provide little tax relief to individuals. He asserts that his approach is more targeted, delivering a benefit to small businesses that will actually make a difference in their competitiveness visa-a-vis out-of-state companies. There’s some pretty good logic to that. And, that could be done from the large surpluses without raising taxes on other businesses and without hitting local governments in their pocket books.

Along with the Chamber and numerous business organizations, the Municipal League registered opposition. It points out that cities are highly dependent on GRT revenue and can’t take a big hit. This concern registered with committee members.(Nice to be on the same page with you, A.J. Forte!) Sen. Natalie Figueroa (D-Bernalillo) raised good questions about how the effectiveness of giving a deduction would be measured. She wants to see a five-year sunset provision and a definitive standard for measurement of results.

While the bill was temporarily tabled, the discussion was robust, and we were very pleased to see David Abbey, former director of the Legislative Finance Committee, providing his assistance and thoughts on this issue. But, as long as a tax on business is in the bill, we cannot support it.

IN THE HOUSE

The late Rep. Eliseo Alcon had a tradition of handing out red chile chips every year. These chips are locally manufactured in Milan. After his passing and because his seat is still vacant, Rep. Patty Lundstrom assumed the duty of dealing out the chips. Trust us, she is a very popular lady today (and most other days, too).

United New Mexico soccer team president Peter Trevisani was recognized for his contributions to our state. He lives in Santa Fe and is very dedicated to community service.

Kairos Power was recognized for bringing a new engineering center to Mesa del Sol. Its specialty is advanced nuclear energy development, but the New Mexico facility will be involved in non-nuclear initiatives. The center is expected to generate $450 million in economic impact, bringing 100 new jobs and also opening opportunities for interns from UNM and CNM. In case you’re wondering, kairos means at the right or opportune moment. It’s Valentine’s Day tomorrow – that would be kairos moment.

SIGNING OFF FROM SANTA FE

A somewhat less hectic day for us today, but stand by, the pace picks up tomorrow through Saturday. It’s very disappointing to see bills pass committee proposing to drastically increase the state’s minimum wage. We wonder what part of “small businesses are struggling” don’t people get? Raising labor costs simply ends up fueling inflation. Whatever wage increase one gains is quickly lost in higher prices or even job loss. Maybe we need to extend those financial literacy classes to some other folks…just sayin’. We hope you all have a fab evening, and we’ll see you tomorrow.