Future disaster costs shadow state tax bills

By Sherry Robinson
All She Wrote
 

            Republicans want to get rid of personal income taxes in the state, and they’ve made it their priority for the current legislative session. It’s a big step, but in recent years a surge in oil and gas revenues have fattened state coffers so much that we can think about it.

    “Eliminating the personal income tax will return more than $2 billion a year to New Mexico’s families, without disrupting our public services or tax credits that many families rely on,” wrote House Minority Leader Gail Armstrong, R-Magdalena, in an op-ed.

     Freshman Rep. Elaine Sena Cortez, R-Hobbs, has said she will carry legislation to eliminate the personal income tax, noting that nine states don’t tax personal income.

     You can’t deny the appeal. Wouldn’t we all like to be free of state income taxes?

     But lately the president has lobbed a deal killer into this proposal and the Democrats’ plans to reduce taxes. The whole picture of state revenues just changed.

While touring disaster areas in North Carolina and California, the president said he was thinking about getting rid of FEMA. “It’s very bureaucratic, and it’s very slow,” he said.

He’s got that right.

“I’d like to see the states take care of disasters,” he said. “Let the state take care of the tornadoes and the hurricanes and all of the other things that happen.” That would be faster and cheaper than sending in FEMA. He suggested that Washington might provide money directly to the states.

The way FEMA has operated for decades is that after a major disaster, local officials ask the president to declare an emergency. That ask tells the president that the disaster is beyond local and state governments’ ability to respond, according to an Associated Press explainer. The emergency declaration opens the federal purse and involves FEMA, which can reimburse local governments for rebuilding roads, bridges and public buildings. The agency will also help individuals with short-term needs like food, clothing or a motel room or longer-term help like rent assistance or some money to help rebuild. FEMA will also pay for projects intended to protect the community in the future.

It’s not there to manage disaster recovery or to make disaster victims whole.

As I’ve written previously, from its creation in 1979 to 2003, FEMA was a small, agile, independent agency that responded quickly. After it became a division of the Department of Homeland Security, it became another bureaucratic cog. Decision making, spending and communications bogged down. President Trump criticized former President Biden for not fixing the problem, but none of the presidents have fixed the problem.

Whatever criticism we have of FEMA, we can probably agree that it’s better than nothing. Are states ready to shoulder these responsibilities? I doubt it. New Mexico certainly isn’t. Is it even cost efficient for states to replicate 50 little FEMAs?

Now throw in politics. The president plans to help red North Carolina, which voted for him, but he’s placing conditions on help for blue California, which didn’t vote for him and whose governor he despises. During his first term he held up disaster aid to Puerto Rico and California. The traditional political promise – I’m here to serve you whether or not you voted for me – no longer holds.

How might New Mexico fare? I predict New Mexico will look more like California than North Carolina in terms of the administration’s future treatment.

Returning to the president’s recent comments, the big question is how much the administration is willing to pay states for disaster recovery. The answer so far is, less. Much less. And yet the disasters are getting bigger, and we are even now in another drought.

Until we know more, it’s premature to give up any revenue streams.

Sherry Robinson is a longtime New Mexico reporter and editor. She has worked in Grants, Gallup, the Albuquerque Journal, New Mexico Business Weekly and Albuquerque Tribune. She is the author of four books. Her columns won first place in 2024 from New Mexico Press Women.