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

SPONSOR Foley

ORIGINAL DATE

LAST UPDATED

2/1/06

HB 552

SHORT TITLE Prohibit Minimum Wage Above Federal Minimum SB

ANALYST Francis

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY06

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Conflicts with

SOURCES OF INFORMATION

LFC Files

Responses Received From

Economic Development Department (EDD)

Office of Workforce Training and Development (OWTD)

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

House Bill 552 amends the minimum wage to prohibit any political subdivision from enacting a

minimum wage higher than the federal minimum wage. A political subdivision is defined as a

home rule municipality or H class county.

FISCAL IMPLICATIONS

The current statewide minimum wage is set to the federal minimum wage. With the exception of

the City of Santa Fe, no area of New Mexico would be affected by HB 552 because no other lo-

cal government has a higher wage than the statewide wage. It is unclear how the bill would af-

fect Santa Fe.

House Bill 552 – Page

2

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

EDD reports:

There are currently three other legislative proposals on the table. HB 258 sponsored by Speaker

Lujan would raise the state minimum wage to $7.50 beginning January 1, 2007, and would NOT pro-

hibit local governments from raising the wage even higher. SB 449, sponsored by Senate Pro Tem

Altamirano, would raise the minimum wage to $7.50 per hour over three years, and would prohibit

local governments from exceeding the state minimum wage. Finally, SB 462 sponsored by Senator

Michael Sanchez would increase the state minimum wage to $7.50 per hour effective January 1,

2007, but would also provide a small business payroll tax deduction for the increase in the minimum

wage.

TECHNICAL ISSUES

There is no indication what would happen to a local government who currently has a higher

minimum wage like the City of Santa Fe, whose wage is set at $9.50 per hour.

The bill does not indicate what would happen if the statewide rate, which in statute is set to a

level equal to the federal minimum but is not set at the federal minimum, were to go up.

NF/mt