New Mexico cat and dog owners may be hit with a huge fee increase so that the government can get involved with what is already being provided by the private sector.

Last month, New Mexico lawmakers pushed a 5,000 percent increase on pet food tax through the House Consumer & Public Affairs Committee. House Bill 64 and its sister Senate bill have each passed through a committee, and await further hearings on whether a functional fee (tax) increase of at least $800,000 is what New Mexico pet owners need.

According to lawmakers, the fee increase from two dollars per brand of dog food to $100 per brand is necessary to help low-income New Mexico residents get their cats and dogs spayed and neutered. The goal is to reduce pet overpopulation that a 2012 study found led to a shelter euthanasia rate of over 45 percent between 2008 and 2011. Over 55,000 cats and dogs were euthanized in one year alone.

The study’s authors recommended a pet food tax to reduce overpopulation via spay and neuter programs for low-income residents.

Euthanasia is heartbreaking, and overpopulation issues are serious matters of public safety, public health, and animal welfare. But new taxes which will increase costs on business – especially independent local companies – and consumers are not the answer. And while it is concerning that versions of the bill have passed two committee, my organization – the Pet Industry Joint Advisory Council (PIJAC), an advocacy group for the pet trade – businesses in the state, and advocates for limited government are coming together to try and reverse course:

However, opponents of the bill said the proposed fee would inflict a 5,000 percent tax increase on pet food, which will “undoubtedly be passed onto retailers and consumers,” said Robert Likins, vice president of government affairs for the Pet Industry Joint Advisory Council (PIJAC). 

.…“Smaller retailers would be more adversely affected than larger ones, as they need to carry smaller, unique brands to differentiate themselves. Larger retailers would be more affected than online sellers, as this is one additional overhead cost that only brick-and-mortar businesses would be subject to.” 

Mike Bachicha, president of Bone-a-fide Dog!, an independent pet specialty store in Albuquerque, N.M., said his biggest qualm with the bill is the huge percentage increase the tax would impose. 

“It’s another hurdle that a brick-and-mortar business has to overcome versus big-box and online,” Bachicha said. 

Food comprises about 70 percent of Bone-a-fide Dog!’s inventory, and Bachicha said he believes that if the bill passes as it is currently written, it will have a huge impact on his business. 

Americans for Tax Reform took the fight nationwide, hammering lawmakers in a Forbes column. And the New Mexico-based Rio Grande Foundation is reminding lawmakers that extra taxes aren’t necessary.

Proponents say the tax will play a key role in stopping high euthanasia rates, and that pet food manufacturers can afford the extra price – and if they can’t, pet owners can:

New Mexicans shouldn’t worry if the highly profitable pet food corporations pass along to consumers the increased fee by proportionally raising pet food prices. Based on the latest data, each New Mexico pet owner would pay, on average, only $1.38 per dog or cat for the entire year – that’s less than 3 pennies a week.

Basic economics make this argument bunk. First, most taxes and fees are small – but they add up. And some lawmakers are pushing for a soda tax, so taxes may go up again in the near future.

Second, speaking of well-funded, many millions-dollar non-profits already provide spay and neuter services for as little as $10. And this proposed tax penalizes smaller shelters and rescues that purchase pet food but don’t have the resources to conduct spay and neuter operations – giving an advantage to larger entities.

Third, once a tax is imposed, it hardly ever goes away. And it usually goes up. Poor New Mexico residents, especially, are going to be hurt by “pennies a week” taxes.

Fourth, according to the bill sponsor, more than 11,000 cats and dogs will be spayed and neutered if this tax is implemented. That’s about $75 per surgery – well above the $10, $30, and $50 options available through the private sector (though at least one shelter charges up to $100 for dogs). Clearly, government efficiency is already anticipated.

Late last year, Governor Susana Martinez slammed a study looking at a soda tax, and she has generally been opposed to tax increases. Let’s hope it doesn’t get that far, and that solutions that don’t take scarce dollars out of the pockets of pet owners are prioritized.