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Tax hike necessary to avoid layoffs, furloughs, service cuts

On March 5, the Albuquerque City Council voted to raise the city’s gross receipts tax rate by three-eighths of a percent on an 8-1 vote without putting it to a public vote.

The increase goes into effect July 1 unless vetoed by the mayor and the Council does not override the veto with six or more votes.

The tax of three-eighths of a cent will potentially raise $22 million this year and upward of $55 million each year thereafter.

It represents 38 cents more paid in gross receipts tax for every $100 in purchases.

Revenues generated by the tax will be applied to the $40 million-dollar projected deficit and applied to public safety and the hiring of police officers. …

The Albuquerque City Council was at breakneck speed … to enact the tax for it to be on the books by April 1 and for it to commence being collected by the state on July 1, when the city budget for fiscal year begins for the city. The City Council is required by law to enact a city budget that is fully balanced and without any deficits.

Without the guarantee of the tax revenues generated by the new tax, the budget deficit of $40 million could have only been resolved by extensive cuts, including layoffs, furloughs and elimination of services.

Had the tax been enacted after April 1, it would not go into effect nor be collected until Jan. 1, 2019. The City Council could have put the tax increase on the ballot for a vote with a special election, but had it passed, it would not go into effect until Jan. 1, 2019.

Had the Council called for a special election and put it on the ballot, it would have been a mail-in ballot costing $500,000 for printing of ballots and postal costs, money the city does not have.

There is always a significant risk voters will say no to any tax, even if it is dedicated to public safety. Mayor Martin Chávez tried to get a public safety tax enacted years ago, and it failed at the polls.

The City Council’s tax increase now goes to Mayor Tim Keller for approval or veto. Keller is taking heat from the public and the media for backtracking and breaking his campaign “promise” to have a public vote on any tax increase. When Keller does not veto the measure, he breaks his campaign promise, thereby losing his credibility with many voters. Even if the mayor vetoes it, there are enough city councilors who voted for it to override his veto.

A promise not to raise taxes without a public vote by any candidate for mayor is meaningless when said from the get-go and nonsense that should not be taken too seriously. No candidate for mayor really knows what is going on with city finances until he/she actually look at the books.

Keller making the promise as a candidate was at best idealistic and at worse being foolish just to garner votes to get elected.

Candidate Keller saying he would draw from various agencies, departments and programs where large, misappropriated budgets existed to deal with any city deficit sounded fantastic but was not very realistic after the eight years of budget cuts and downsizing of government.

Any candidate for office usually regrets making promises regarding raising taxes to get elected; just ask former President George H.W. Bush when he said “Read my lips, no new taxes!” and lost to Bill Clinton.