Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR	Aragon		DATE TYPED	2-8-04		HB
SHORT TITLE		Senior Tax Expenditure Economist				SB	208
					ANALYST		Reynolds-Forte

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY04	FY05	FY04	FY05
	$100.0			Recurring	General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department

Department of Finance and Administration

SUMMARY

Synopsis of Bill

Senate Bill 208 appropriates $100 thousand to the Taxation and Revenue Department in fiscal year 2005 to hire a full-time senior tax expenditure economist. Any unexpended funds remaining at the end of FY05 will revert to the general fund.

Significant Issues

The Taxation and Revenue Department believes that the purpose of the bill appears to be for the Department to produce a report on tax expenditures on a periodic basis. Compiling a tax expenditure report requires addressing a number of difficult definitional and analytical issues (see the discussion below), and requires systems modifications and data acquisition. Given these caveats, however, the Department believes the purpose can probably be met within the existing resources.

FISCAL IMPLICATIONS

Senate Bill 208 appropriates $100.0 to the Taxation and Revenue Department for FY05 for the purpose of hiring a full-time senior tax expenditure economist.

ADMINISTRATIVE IMPLICATIONS

The Department currently has five FTE in the Tax Research Section of the Department. This bill will provide one additional FTE which will be place in Tax Research. The Taxation and Revenue Department states in their analysis that they welcome an appropriation to expand its economic analysis capabilities. However, they believe the purpose can probably be met with existing resources.

OTHER SUBSTANTIVE ISSUES

The Taxation and Revenue Department points out that during the deliberations of the Blue Ribbon Tax Reform Commission in the 2003 interim, the need for an analysis of tax expenditures was cited a number of times. The Taxation and Revenue Department believes that the purpose of the bill appears to be for the Department to produce a report on tax expenditures on a periodic basis. Compiling a tax expenditure report requires addressing a number of difficult definitional and analytical issues and requires systems modifications and data acquisition.

BT/njw