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THE NEW MEXICAN Tuesday, November 5, 2013
LOCAL NEWS Councilors reluctant to hike gross-receipts taxes City to face steep revenue shortfall when state cuts ‘hold-harmless’ distributions By Tom Sharpe
The New Mexican
No Santa Fe city councilors showed any enthusiasm for raising gross-receipts taxes when the issue of how to cover a future revenue shortfall came up Monday at a city Finance Committee meeting. New Mexico municipalities face a loss of revenue in coming years as the result of a last-minute tax deal between the state Legislature and Gov. Susana Martinez earlier this year that will shift money away from local governments to make it easier for the state to balance its budget. Since 2004, when the state repealed grossreceipts taxes on groceries, the state has reimbursed city and county governments for the revenue they lost from their share of grossreceipts tax collections. However, the new law will phase out those “hold-harmless” distribu-
tions to local governments starting in 2015, with the payments completely gone by 2019. The change could mean the losses of millions of dollars in revenues to the state’s larger cities, including about $630,000 to Santa Fe in the first year. While the governor has vowed not to sign any tax increases into law during her four-year term, this year’s compromise did authorize municipalities to raise their local gross-receipts tax rates. But when the city of Las Cruces tried to enact an increase of two-eighths of 1 percentage point, the state Department of Finance and Administration rejected it on a technicality. On Monday, the city of Santa Fe’s finance director, Marcos Tapia, presented the city Finance Committee with an analysis of how Santa Fe would benefit if it raised its grossreceipts tax rate, sometimes called a sales tax, by either one-eighth or three-eighths of 1 percent. The city’s rate is currently one of the state’s highest, at 8.1875 percent. The county’s rate is 6.625 percent. Tapia made it clear that no one on the council has proposed such a hike. And after his
presentation, both Councilors Patti Bushee and Peter Ives said they are reluctant to raise grossreceipts taxes. They said that if the city needs extra money to replace the losses in 2015, they would prefer, instead, tapping some of the cash reserves in the city budget. “Who wants to raise the GRT?” joked the committee’s chairman, Councilor Carmichael Dominguez. But the others on the committee remained silent. After the meeting adjourned, Bushee said she might consider a “sin tax” on alcohol and cigarettes to make up the deficit, although those substances are subject to state and federal regulation. “I think that makes much more sense than putting it back on food,” she said. The New Mexico Municipal League recently began pushing for legislation that would let local governments reinstate a tax on the sales of groceries sold locally. Despite what the league’s executive director claimed was a near unanimous endorsement of such a plan by leaders of the state’s municipalities, the governor has said she is against that idea. Contact Tom Sharpe at 986-3080 or tsharpe@sfnewmexican.com.
LOST IN LEAVES
Contractor Tom Stone, with At Your Service, uses a blower to pile leaves outside federal buildings along South Federal Place on Monday. LUIS SÁNCHEZ SATURNO/THE NEW MEXICAN
Summit focuses on preparing students for workforce Speaker calls disconnect between educators, employers ‘a clear and present danger’ By Robert Nott The New Mexican
Is America’s public-education system adequately preparing its graduates for careers in the workforce? About 100 educators, policymakers and economic-development experts from 22 states and several territories joined several governors Monday in a daylong summit meeting to discuss that issue at the Inn and Spa at Loretto in downtown Santa Fe. The event, hosted by Oklahoma Gov. Mary Fallin, is a continuation of a regional summit she held last month in Connecticut. “The role of education must be more than just preparing a person for a job. We must prepare them for a good job, a relevant job,” the Oklahoma Republican told the assembly during her opening remarks. And the problem goes far beyond the traditional K-12 public-education system, as a recent national study made clear. The study said fewer than 2 in 5 hiring employers who interviewed college graduates found the applicants prepared to handle the job. Joseph Fuller, a senior lecturer and professor at the Harvard Business School who gave the keynote presentation during Monday’s summit, called the disconnect between educators and employers “a clear and present danger to our economy and our kids’ futures.” He said educational institutes and businesses are not working closely enough to
ensure that what kids are learning will apply to the jobs that exist. He also told attendees that too many K-12 students aren’t learning basic foundation skills, also called soft skills: How to socialize, show up on time and maintain a professional appearance. If they don’t learn these skills from home and school, Fuller stressed, “all that’s going to happen is they’re not going to get hired … they’re going to get fired.” He advocated investing more in both training and hiring school guidance counselors who can pinpoint the talents of individual students and get them thinking about pursuing those career paths in school. If, for instance, a child shows little aptitude or interest in science and math but has a penchant for salesmanship, that student should be directed toward courses and colleges that will support him in that talent. Fuller also emphasized that often community colleges can do a better preparing a student for a job than a four-year-college. He spoke of successful partnerships around the country — including in South Carolina and Georgia — where community college leaders and regional employers work together to ensure the schools offer career-ready courses. Fallin said she is working with Oklahoma business owners to build career ladders out of school and into that state’s top industries, which include aerospace, financial services, agriculture and transportation. She said leaders have to find a way to do a better job reaching out to middle school students to get them thinking about their futures. “A lot of high school students don’t know what they want to do and end up with minimum-wage jobs,” she said. She acknowl-
edged she wasn’t sure what she wanted to do at that age either: “I didn’t expect to be a governor.” Utah Gov. Gary Herbert, another Republican who attended Monday’s event, said employers in his state are concerned that there is no alignment between schools and jobs. He said the state created UtahFutures. org, a website that gives students resources to plot out careers based on both dreams and needs. For instance, he said, if a student wants to eventually own a three-bedroom house, two cars, have two kids and make room for a dog, the website can lay out for that student what he or she needs to learn and earn and what jobs exist to make that dream a reality. Part of the summit’s goal was to share best practices, and following study sessions among individual groups of participants, several ideas came forth to link business with education. One participant noted a successful alliance between Mercedes Benz and Shelton State Community College in Alabama in which college students start internships at Mercedes Benz during the first week of school, earning experience and credits. In many cases, these students land jobs with the company upon completion of their associate degree. Another participant said that in Kentucky, the state’s higher-education department is no longer approving new courses or certificates that do not correspond to likely job openings in the state. Fuller acknowledged that growing partnerships between business and education can heighten concerns and questions about the potential privatization of public education. But, he said, “There’s no bigger business in the United States than K-12 public education.”
A national study reported that fewer than 2 in 5 hiring employers who interviewed college graduates found the applicants prepared to handle the job. Section editor: Howard Houghton, 986-3015, hhoughton@sfnewmexican.com Design and headlines: Carlos A. López, clopez@sfnewmexican.com
Thousands in N.M. allowed to keep, extend health policies By Staci Matlock The New Mexican
Thousands of New Mexico residents with existing health insurance plans that don’t meet the new federal health insurance law won’t have to get new policies, at least not immediately. Some can get an extension until Dec. 31, 2014, and some can stay on their current health insurance plans indefinitely if the company doesn’t make any changes to the policies. Blue Cross Blue Shield of New Mexico, for example, has 17,000 members who had health insurance policies in place before the federal Patient Protection and Affordable Care Act became law on March 23, 2010. About 3,000 of those members live in Santa Fe County, according to Becky Kinney, spokeswoman for Blue Cross Blue Shield of New Mexico. Those existing plans were “grandfathered” in and don’t have to meet the new federal law requirements. “If these members choose not to make any change to their policy, they may keep these indefinitely,” Kinney said. Those plan-holders will see their rates increase 10.2 percent next year. Those members with grandfathered plans also can choose to get a new health insurance plan directly through an insurance company or through the federal health insurance exchange website. Another 11,000 Blue Cross Blue Shield of New Mexico health insurance policyholders, most of them self-insured through the individual market, don’t have plans that are “grandfathered” in. They will have to purchase new policies through Blue Cross Blue Shield or the health exchange because their existing plans have to be terminated or changed to meet the new federal health care law, according to Kinney. Blue Cross Blue Shield of New Mexico worked out a deal with the state Office of Superintendent of Insurance to give those policyholders extra time to buy new health insurance. Individuals with “nongrandfathered” plans can renew their existing policies by Dec. 1. Their policies will be good then until Nov. 30, 2014, Kinney said. After that, they will have to select a health insurance plan that complies with the Affordable Care Act. Janice Torrez, vice president of external affairs for Blue Cross Blue Shield of New Mexico, said the company “wanted to give clients the greatest amount of time to decide whether they wanted to stay with their plans or get into the federal health insurance exchange.” People who keep their non-grandfathered health insurance plans for another year will see a 9.2 percent increase beginning Jan. 1, 2014. Lovelace Health System also asked for extensions through next year for policyholders on some of its existing individual plans, according to state Insurance Superintendent John Franchini. “It gave people on individual plans more time to select a new one,” Franchini said. Many New Mexicans with individual policies through Presbyterian Healthcare Services have received notices that their policies will be canceled because the plans don’t comply with the new federal health law. Presbyterian didn’t ask for an extension from the state because they didn’t think they would need to, Franchini said. The company thought the federal health insurance exchange would be working by now. Aaron Ezekiel, who is managing the health insurance exchange for the Office of Superintendent of Insurance, said insurance companies could grandfather in plans that didn’t comply with the Affordable Care Act, as long as they made no changes to those policies. “We’ve allowed companies to extend their expiration date,” Ezekiel said. “If they had plans that were going to expire in April, they could extend the plan until Dec. 31, 2014. But they had to apply for the extension.” He said the grandfathered policies are typically “closed block,” meaning no new members are accepted to the plan. “Older plans have all kinds of limitations, particularly in the individual market,” he said. Ezekiel said it doesn’t make sense for insurance companies to try to make older, closed-block plans comply with the new federal health care law. “Closedblock plans with mostly older and sicker members adds a whole lot more liability,” he said. “If a whole group is age 60-65 and they are getting sick, you are not doing them a favor to keep on an old plan. Under the federal exchange, they may qualify for a subsidy. But switching plans never makes people happy.” After age 65, people qualify for Medicare and don’t have to get individual health insurance. New Mexico Health Connections, Molina Healthcare, Presbyterian, Lovelace and Blue Cross Blue Shield of New Mexico are all offering health insurance plans through the federal health care exchange. Each company website offers more information. People with questions or concerns about the state or federal health insurance exchange can call Ashley Hernandez, ombudsman with the state Office of the Superintendent of Insurance, at 855-857-0972 or 827-4465. “Ashley’s job is to know where people should fit,” Ezekiel said. “They can call her anytime. We will try to pick up the ball and run with it for folks running into these issues.”
Be prepAred Paperwork to have on hand before you enroll in an insurance plan: u Social Security number for each person covered under the plan; copy of tax forms or pay stub; IRS Schedule C if you are self-employed; copy of a utility bill; ZIP code; a list of your family’s medical history and past medical costs. (This can help determine the level of plan you want — bronze, silver, gold or platinum.) u Find out more at bewellnm.com or call a local insurance broker. u Take a look at various insurance plans available through the exchange at nmhealthratereview.com/ about.aspx
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