2022 Governor's Race

Ronchetti Flexes Policy Chops With Major Tax Cuts, Oil & Gas Rebate

Republican Mark Ronchetti announced his 8-point economic plan for New Mexico

Government spending in New Mexico has increased 35% since Michelle Lujan Grisham took office in January 2019, buoyed by record revenue from the state’s booming oil and gas industry.

Republican challenger Mark Ronchetti wants to give some of that money back to taxpayers.

“Inflation is crushing New Mexico families. The rising cost of everything from gas and food to vehicles and homes is taking a tremendous toll. And yet, as New Mexicans’ earnings and wage growth are wiped away by higher prices, state government has never been richer. Elites in Santa Fe have used record budget surpluses – fueled by oil and gas production – to grow government to its largest size ever.”

–The Mark Ronchetti Economic Recovery and Inflation Relief Plan

In an eight-point plan released Thursday, Ronchetti outlined steps to curb inflation, boost workforce participation, cut taxes for low- and middle-class workers, and set up automatic rebate checks based on oil and gas profits.

“My approach is to take surplus oil and gas revenues and give New Mexico families a rebate. It’s your money to begin with,” Ronchetti said of his rebate proposal.

For every $1 billion the state receives in oil and gas revenue per year, New Mexicans regardless of age would receive $100. Based on current production, “this would amount to more than $500 for every man, woman, and child in New Mexico.”

Ronchetti’s tax plan would create a 0% bracket for anyone making less than $10,000 per year, compared to the 1.7% to 3.2% tax currently imposed on workers making up to $11,000. Married couples earning between $20,000 and $80,000 would see their tax burden fall from 4.9% to 2.9%.

The top income bracket of 5.9% for individuals making $210,000 or couples making $315,000 per year would not be changed.

The average low-income worker earning between $25,000 and $50,000 would have their income tax bill cut by more than half, saving up to $750 per year. A family with two-earner gross income of between $75,000 and $100,000 would save up to $1,800 annually, cutting their yearly tax burden in half.

–The Mark Ronchetti Economic Recovery and Inflation Relief Plan

Ronchetti is also proposing recurring cuts to the Gross Receipts tax of an eighth to a half a percent every year based on budget projections; ending the practice of “tax pyramiding” for small businesses; and requiring cities and counties to seek voter approval for tax increases.

Taken as a whole, Ronchetti’s plan is a sharp turn from the philosophy that has justified Democrat spending increases year after year. It is an ideological divide that too few voters seem to understand.

On the one hand, you have do-gooder Liberals who believe in taking your money to fund government programs to help the few. On the other, you have free-market Capitalists who believe workers know best how to spend their money.

But it’s not merely a difference of ideology. It’s a difference of results.

Lujan Grisham herself released a 10-point economic plan when she campaigned for governor in 2018. It included things like increasing the minimum wage, increased spending on renewable energy, and spending on film industry subsidies. None of which had the desired effects on the state’s economy or still last-in-the-nation unemployment rate.

Ronchetti’s plan is a contrast not only in priorities but in philosophy.

While not all government spending is bad–take police and fire protection, as examples–there comes a point where increasing taxes and government spending disincentivizes work and leads to greater rates of poverty. The larger the safety net, the less incentive there is to work, particularly when the government is taking more and more of your paycheck.

Ronchetti’s proposal goes beyond tax cuts and includes a plan to reduce unemployment insurance from 24 weeks to 16 in an effort to boost workforce participation, which is currently the third lowest in the country, at 56.9% (tied with Arkansas).

“[I]n today’s job market, it’s reasonable for people to find work within 4 months,” Ronchetti wrote.

The focus of his plan proves that Ronchetti isn’t content coasting to November on MLG’s unpopularity and failed policies. The ideas he put forth would make a real difference in the lives of New Mexicans struggling to make ends meet.

His proposal is fair, and the philosophy behind it is sound. In 2018, New Mexico was operating on a state budget totaling $6.3 billion. Four years later, it topped $8.5 billion, the “Biggest budget in state history,” according to SourceNM.

If the state can afford a 35% budget increase in four years, it’s only fair that some of that money gets kicked back to the residents who make New Mexico what it is.

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