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A month after Albuquerque City Councilor Dan Lewis proposed repealing a four-year-old tax hike, two councilors have filed competing legislation that would maintain the tax, but clearly define its uses.
And Lewis himself now is tweaking his proposal to reduce – but not completely eliminate – the tax.
At issue is the 3/8 of 1% gross receipts tax increase the City Council passed – and Mayor Tim Keller signed – in 2018 and which has yielded somewhere around $50 million annually.
Lewis last month introduced legislation to repeal the tax, saying the city could financially withstand the tax cut.
But Councilors Isaac Benton and Pat Davis now have filed a bill that would keep the tax intact, but designate it for specific purposes – 60% for public safety and 40% for affordable housing.
And Lewis said he is substituting his original bill. His new proposal trims the tax to ¼ of 1%, and puts 60% of the resulting receipts into public safety and 40% “toward addressing homelessness and affordable housing, and thereafter for general purpose.” Those allocations would run through fiscal year 2028.
The competing bills are headed to the council’s Finance and Government Operations Committee meeting on Monday.
Davis said his legislation is not a direct response to Lewis’ January tax-cut proposal, but rather the result of conversations going back to last year. He said his and Benton’s proposal aligns with the tax’s original intent, noting that, when the council passed the increase in 2018, it required that at least 60% of the receipts go to public safety. That stipulation, however, expired after two years.
Resurrecting that requirement and focusing the rest of the tax’s revenue on affordable housing, he said, makes sense because it gives the city ongoing revenue to tackle crime and housing instability.
“Those are the city’s two biggest priorities,” he said, noting that the city often has one-time money to build affordable housing, but not the recurring funds to operate it.
Lewis, meanwhile, said his bill funds public safety and homelessness initiatives, but has the added benefit of slightly lowering the gross receipts tax – a tax paid on the sale of nearly every good and service.
“I think this is a good step for us,” he said.
The city budget anticipates the tax will yield $53.6 million in fiscal year 2022. However, Lewis said booming revenue trends indicate it could top $70 million, so that public safety could still get more under his proposed lower tax rate than it did when the city implemented the tax four years ago.