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Page 57

New Mexico

Gary E. Johnson, Republican

Legislature: Democratic

Took Office: 1/95

Grade: B

A true citizen-lawmaker who calls himself a libertar-

ian, Johnson never sought nor held an elective office before

winning the statehouse in 1994.  He started his own con-

struction business while still in college and built it into

one of the largest construction companies in the state.  In

a big-government state like New Mexico, where the state tax

burden has long been among the most oppressive in the na-

tion, Johnson's staunch fiscal conservatism has been much

needed, but also much resisted.  In his first year in office

he proposed $85 million in tax cuts, including a $47 million

personal income tax cut--reducing the top rate from 8.5 per-

cent to 8 percent--and a 6-cent gas tax cut.  The Democrat-

dominated legislature approved only a 3-cent gas tax cut

worth about $15 million.  In 1997 Johnson proposed a modest

$15 million personal income tax cut that the legislature re-

jected; instead, it sent him a $45 million 5-cent per gallon

phased-in gasoline tax hike that Johnson vetoed.  This year

Johnson again proposed a modest income tax cut of about $20

million, reducing the top rate from 8.5 percent to 8.3 per-

cent.  Surprisingly, the legislature sent him an even larger

tax cut package of $60 million, including a reduction of the

top rate to 8.2 percent and elimination of the sales tax on

prescription drugs, partially offset by a 12-cent cigarette

tax hike.  Johnson vetoed the cigarette tax hike and enthu-

siastically signed the income tax cut into law.  On the

spending side, general fund expenditures went up by 10 per-

cent per year over the six years preceding the Johnson ad-

ministration.  In Johnson's first year, spending rose by

about 6 percent, and since then spending growth has averaged

less than 4 percent per year.  He has also reduced the num-

ber of state employees by nearly 10 percent, and he has set

a state record for legislative vetoes.  While New Mexico is

still a high-tax state, Johnson has made great strides in

reducing taxes and slowing spending growth, much to the dis-

pleasure of the entrenched tax-and-spend culture in Albu-

querque.

Score

Grade

Rank

Overall Fiscal Policy Score

61

B

5

Spending Score

57

B

17

Revenue and Tax Rate Score

63

B

4

Amount

2.2%

Average Annual Change in Real Per Capita Direct General Spending through 1996

-1.0%

Average Annual Change in Direct General Spending Per $1,000 Personal Income through 1996

-2.3%

Average Annual Recommended Change in Real Per Capita General Fund Spending through 1999

-0.9%

Average Annual Change in General Fund Spending Per $1,000 Personal Income 1996-98

0.5%

Average Annual Change in Real Per Capita Tax Revenue through 1997

-1.7%

Average Annual Change in Tax Revenue Per $1,000 Personal Income through 1997

-3.9%

Average Annual Recommended Change in General Fund Revenue Per $1,000 Personal Income through 1999

-0.9%

Average Annual Change in Real Per Capita General Fund Revenue 1996-98

-0.9%

Average Annual Recommended Tax Changes as % of Prior Year's Spending through 1999

-0.5

Change in Top Personal Income Tax Rate, proposed and/or enacted (% points)

0.0

Change in Top Corporate Income Tax Rate, proposed and/or enacted (% points)

15.8

1998 Combined Top Income Tax Rates (Personal plus Corporate) (*0.5)

0.0

Change in Sales Tax Rate, proposed and/or enacted (% points)

-6.0

Change in Gas Tax Rate, proposed and/or enacted (cents per gallon) (*0.5)