Following Up on New Mexico Food Tax Debate; Effort in Navajo Nation Would Promote Healthier Food Alternatives

Do you remember the proposal to restore the tax on groceries in New Mexico last fall?  The New Mexico Municipal League offered this suggestion as a a way to compensate for the loss of state subsidies without having to raise local base tax rates. Supporters and critics of the plan offered their suggestions in opinion pieces written on the editorial pages of the Albuquerque Journal.  I have a couple of follow-up links to share since I posted that effort in October.

In November, Dick Minzner (former New Mexico Taxation and Revenue Secretary) and Brian McDonald  (Former director of the UNM Bureau of Business and Economic Research), wrote that the elimination of the food tax did not benefit the poor (and, in fact, hurt them) and helped middle class shoppers.  Read  Ending the Food Tax Actually Hurt New Mexico's Poorest

In reply, State Sen. Jacob Candelaria (Democrat, Albuquerque) and Fred Nathan (executive director of Think New Mexico) offered a different point of view in a piece published in December. They argued that the move to eliminate the food tax in 2004 had truly helped the poor in New Mexico, and restoring the measure would be harmful to low-income residents of the state. Read Food Tax is a Step Backward

There were some suggestions that a proposal to restore the food tax would come up again in this year's short  session of the the New Mexico State Legislature. Even though the shorter 30-day sessions are intended to discuss budget-related issues, there was no move to restore the food tax this year.

Navajo Nation effort to tax junk food

Around the same time as the State Legislature was meeting, a food-tax debate of another sort came up. The discussion occurred at the headquarters of the Navajo Nation in Window Rock, AZ. The Navajo Nation spans parts of three states: Arizona, New Mexico and Utah. The debate in Window Rock did not center on revenues but on health-related issues.

On Jan. 30, the Navajo Nation Council voted 12-7 in favor of  Healthy Diné Nation Act, which would have enacted a 2-percent increase on processed foods high in fat, sugar and salt. Those foods would have been charged a sales tax of 7 percent. The revenue collected from the tax hike would have been deposited into a special fund to develop wellness centers, parks, basketball courts, trails, swimming pools, picnic grounds and health education classes.

In a separate but parallel move, the Council also proposed to fully eliminate the existing 5-percent sales tax on fresh fruits and vegetables and nutritious snacks such as seeds and nuts. The measure was approved by an overwhelming vote of 17-1.

The two measures were primarily intended to make it easier for residents of the reservation to buy healthy foods. “Each one of us here has a relative that’s diabetic, and we face that fact every single day,” bill sponsor Danny Simpson told the council.

The vote was the culmination of a two-year grassroots campaign by members of the Diné Community Advocacy Alliance who studied rates of obesity and diabetes on the reservation and decided existing prevention programs weren’t doing enough. “Even though there was a lot of education, people seemed to not be listening,” Gloria Ann Begay, project manager for the Diné Community Advocacy Alliance, told the  Indian Country newspaper. “So we looked at policies like the tobacco tax or the seat belt laws and we decided that taxing junk food might discourage the purchase of it.”

Proponents of the two tax efforts also expressed hope that the measure would persuade store owners on the reservation to carry more healthy food so low-income residents to broaden the choices available to reservation residents.

The  Healthy Diné Nation Act attracted national attention, including a piece in the The Wall Street Journal

Tribal President's Veto Does Not Deter Proponents

DCAA logo

The efforts to promote healthy foods on the reservation experienced a temporary setback, as Tribal President Ben Shelley vetoed both measures in mid-February. He explained that the language in the initiative to increase the tax for junk food was vague and unenforceable. “This proposed tax will be imposed on the Navajo people, not the food and beverage industry or its distributors,” Shelly said in a press release. “The junk food importers will continue business as usual."

Shelley urged the council to conduct more research and return with a better bill. "There is no impact analysis. What's the impact on the local businesses, especially the small businesses?" Shelly asked. "Is this tax legislation going to become law without the Nation clearly understanding its impact on Navajo businesses?"

But proponents believe the two bills as written would accomplish their intended goal,. "The two pieces of legislation were meant to bring awareness and take responsibility of our health problems, to address access to healthy foods and the consumption of junk foods, and to initiate a health policy that would be sustainable for our people," the Diné Community Advocacy Alliance (DCAA) said in a press release after Shelly issued the vetoes. 

According to the Farmington Daily Times, in Farmington, New Mexico,  the two override bills are elegible for committee action on March 26. They were assigned to the Naa'bik'íyáti' Committee and the council, where final authority rests. If the measures, introduced by Navajo lawmaker Jonathan Hale, are approved in committee, then the next move would be up to the full Council, which meets in April. The override would require support from two-thirds of the 24-member legislative.  Stay tuned.