Gibson to propose tax rollback

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By Kirsten Laskey

Los Alamos County is predicting a positive future for its finances. The government’s long-range financial plan projects revenues will exceed expenditures for several years. But rather than allow the county’s savings to balloon, Councilor Robert Gibson proposes giving taxpayers a break.
During the Dec. 7 council meeting, Gibson will present three ordinances. Each of them proposes to repeal a 1/8 percent gross receipts tax (GRT) increment. The percentage is 1/8 because taxes are imposed in 1/8 increments.
The first ordinance Gibson intends to introduce addresses a general increment; the second focuses on a county correctional increment and third is for a fire protection increment. Each increment repealed would equal a $2 million reduction in revenue to the county.
The county receives approximately $56 million a year from GRT.
If approved, the lower tax rates would go into effect July 1, 2011.
Although reducing the GRT rate would mean the county would have less money in the bank, Gibson said the reduction would not impact planned county services or spending.
In addition, “if all three increments are repealed, the average Los Alamos household would save more than $200 per year,” he said.
Another benefit, Gibson said is “lower gross receipt taxes would make Los Alamos businesses more competitive and makes this a more desirable place for businesses to locate.”
Some retail customers, he said, do look at GRT rates. If they are higher in one area than another, then they will shop in the area with a lower GRT rate. Also, if someone does business here and in another area, they may pay taxes in Los Alamos if the county has a lower rate.
Gibson added that the county currently has revenue that exceeds its already high level of spending.
Gibson said he has gotten positive feedback on the proposed ordinances. “The comments I’ve gotten so far from both private individuals and business people have been favorable. The only folks I expect to oppose this are big government advocates.”  
According to a report included the Nov. 9 council meeting agenda, the GRT rates were increased by a .5 percent in 2005 and 2006. Also the current total GRT rate, which is 7.3125 percent, is higher than some other communities including Albuquerque, which is at 7 percent.
Yet, Santa Fe (city) is at 8.1875 percent, and Espanola’s rate is 8.4375 percent. Rio Rancho’s set at 7.1875 percent, and Bernalillo is currently 7.0625 percent.
But it was also pointed out in the report that business activity subject to GRT in Los Alamos County currently totals $1.5-2 billion annually, a number that is likely substantially higher than some surrounding communities due to revenues generated by the lab, which are now subject to GRT.
When there is too much
money, Gibson said, governments tend to spend more.
He added that the state government experienced this very situation a few years ago, but just look now at the state’s financial situation.
GRT is a tax on the sale of goods and services. Chief Financial Officer Steve Lynne said, GRT is collected by the state.
Any business that has a receipt of money from customers has to file monthly.
Businesses report and pay GRT to the state, he said; then the state pays the county its local share.

Contact Kirsten Laskey at lareporter@lamonitor.com

Really save $200?

For the average Los Alamos household to save $200 on a 3/8% tax cut, that would mean we would have to spend $200/.00375, which is $53,000 per year! Is my math incorrect? It seems more likely that the average person would save $20 per year. It also seems like the one to benefit the most from this will be Los Alamos National Security, since they spend the most in the county. I believe Mr. Gibson's number is not taking into account this consumer.