LANL contract high on LA’s legislative priorities

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By Arin McKenna

In December, the Los Alamos County Council approved a list of 2017 state legislative priorities. Efforts to support those priorities are already underway and will kick into high gear when the New Mexico State Legislature opens its session on Tuesday.
Newly elected council Chair David Izraelevitz and County Manager Harry Burgess hold out little hope for council’s top legislative priority: legislation supporting the county’s application for capital outlay funding to develop affordable housing infrastructure.
“We expect that there will be very little to no capital outlay given the current budget situation,” Izraelevitz said.
“We’re hopeful. We have pressing needs, like many other communities around the state. But given the situation, we would be delighted if some of these things get addressed, but I think it’s going to be a very difficult argument to make, given all the cuts in just basic services that the state is looking to impose.”
The county is taking a two-pronged approach to the second priority: adequate funding of local public health offices.
The county has been protesting the New Mexico Department of Health’s decision to severely curtail both hours and services.
“Services related to family planning are not even being offered in Los Alamos any more. They’re being served out of Española, which seems completely impractical, given that usually the most need for services and education is for the youth of our community,” Izraelevitz said.
“And that is the reason why, unlike many other communities, we actually pay for the office lease, so that the public health nurse could be located in that location. And we had a memorandum of agreement that we would provide this location, but in exchange, they would provide services.”
From a legislative standpoint, this issue will be addressed through the FY2018 budget rather than as an individual bill.
Burgess told the Los Alamos Monitor that county representatives are scheduled to meet with Secretary of Health Lynn Gallagher in two weeks to address the issue.
The one priority that will involve legislation of some sort is council’s support for the Regional Coalition of LANL Communities’ (RCLC) efforts towards maintaining the tax structure for managing entities operating New Mexico’s national labs, so that state and regional revenues are not negatively impacted by lab contract turnover.
The coalition and the county want to avoid losing Gross Receipts Tax (GRT) if a nonprofit entity is selected to run Los Alamos National Laboratory. Under the current for-profit management consortium, the county receives approximately $34 million annually in GRT. Those taxes not only support county services but benefit the region through partnership agreements, such as the county’s financial support for the North Central Regional Transit District. When the University of California operated the lab, average GRT was $14 million a year.
The Regional Coalition has already spoken to this issue before the Legislative Finance Committee and is currently working with Rep. Stephanie Garcia Richard (D-District 43) to draft legislation to address the issue.
According to Garcia Richard, the form that legislation will ultimately take is still fluid.
One draft is a standalone bill to that would insure current GRT revenues  are maintained regardless of whether Department of Energy - National Nuclear Security Administration (DOE/NNSA) selects a nonprofit or for-profit entity to run the labs.
There is also the possibility of combining that bill with one being put forward by the New Mexico Hospital Association, which would impose GRT on all hospitals (including nonprofits) that could only be applied to the state’s Medicaid payments. The state is currently losing a three-to-one match in federal Medicaid dollars because it cannot meet its portion of the match. That has a far greater financial impact on hospitals than the self-imposed GRT would have.
Garcia Richard has been in discussions with representatives of the Hospital Association about combining the two GRT bills to greater advantage. The language of such a bill could impose taxation on nonprofit administrators of the national labs and/or nonprofit hospitals or simply tax nonprofits operating above a certain dollar amount.
In terms of the LANL contract, the selling point will be the impact the loss of GRT revenue would have on the state budget. The current contract brings in $70-80 million in state taxes, as opposed to $30-35 million under the previous contract.
“At the end of the day, the bottom line is it’s essential for the state to maintain GRT dollars, not just Los Alamos County,” Garcia Richard said. “So that’s the impetus for putting this forward.”
Council’s other two priorities were supporting legislation that provides sufficient funding for New Mexico public schools and the legislative priorities of the New Mexico Association of Counties (NMAC) and the New Mexico Municipal League (NMML).
Izraelevitz believes that one of Gov. Susana Martinez’ proposals – to decrease government pension contributions to the state’s two main retirement funds by 3.5 percent of salaries – may be in conflict with council’s support for sufficient school funding, since it would affect teacher pensions.
“That’s basically a pay cut for teachers. You can call it what you want, but it’s a pay cut, and that just makes it even more difficult to attract new teachers,” Izraelevitz said.