Council guards against state tax raid

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Legislature urged not to alter gross receipts tax statutes

By The Staff

County councilors paid heed to budget rumbling from the Legislature in Santa Fe. In a unanimous vote, the council passed a resolution Tuesday to oppose any attempt to reduce the county’s share of the Gross Receipts Tax.

According to one scenario, the county could lose some $1,566,700 annually to the state and statewide local governments could lose an estimated $120,953,127.

“I can tell you the legislature is busy at work finding ways to deal with the state’s budget gap,” County Administrator Tony Motillaro said. He said a bill had just been introduced that raised the state GRT rate from 5 percent to 5.5 percent, while restricting the counties from raising their rates.

Before the meeting, Council Vice Chair Sharon Stover, who did not attend, said that the county was encouraged to take the matter up by the N.M. Association of Counties.

“It’s a huge issue for the Municipal League and the number one priority for the association,” she said.

In its Legislative Bulletin for

Jan. 22, the Municipal League termed the $600 million dollar budget shortfall, “the 600 pound gorilla budget issue.”

“In light of the serious statewide budget problem, the league’s board of directors in October adopted the position of maintaining the current funding sources and levels,” the Legislative Bulletin stated in an article. “The Board also reaffirmed the League’s position of opposing any preemption of local taxing authority. In adopting this position, the Board recognizes the state’s budget deficit issues, but also emphasizes local governments’ need to preserve current funding sources in or to provide local services.”

Before voting on the resolution calling for the Legislature to continue to “hold harmless,” provisions of the state’s Gross Receipts Tax Act Status, the councilors discussed some of the forces in play.

Councilor Robert Gibson indicated that he would support the motion, but noted that there was a big unknown in how the Legislature might proceed if they didn’t take this path to pull GRT from cities or counties.

“This is not quite the slam dunk that appears at face value. We don’t know how the legislature will make up this revenue,” Gibson said.

“If they don’t remove money from the counties’ GRT,” he commented, “then what will they do?” They might reduce spending at the government level, he said — however, they also could raise GRT across the board. Gibson said that such a move would impact county taxpayers and would certainly impact the laboratory.

They might raise personal income taxes on a progressive basis as an option, too, he said.

“Probably — given the incomes of folks in this community — we might end up paying a disproportionate share,” if that happened, Gibson said.

 “We don’t know what the Legislature will do with it,” he said. “This may be a case where we rue what we wish for.”

Councilor Vincent Chiravalle said he also supported the resolution.

“If you look at Santa Fe County or the City of Santa Fe, they stand to lose far more, than the $1.5 million estimated impact that Los Alamos County would incur if the GRT were removed,” he said.

Some of the smaller communities in Northern New Mexico would also “feel the pinch,” he said.

The resolution will be sent to the county’s three state senators and one representative and forwarded to the county association to be bundled collectively for the legislators.