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County approves $30M tax hike on party lines

Copyright © 2015 Albuquerque Journal

Tatum Mcintyre says she begged police, at one point, to take her daughter back to the hospital.

It was the only way, she thought, to get her the treatment she needed for bipolar disorder.

Another mother, Deborah Barkoff, said she’s not sure whether her adopted son – an addict who has attempted suicide – is dead or alive.

These and other heartbreaking stories emerged in testimony Thursday as Bernalillo County commissioners considered the biggest tax increase of its kind in a decade.

In the end, the commission narrowly adopted legislation that will raises taxes by $30 million a year, boosting the gross receipts tax rate by three-sixteenths of 1 percent on the purchase of most goods and services.

Starting July 1, the tax rate in Albuquerque will climb from 7 percent to 7.1875 percent, or an extra 19 cents on a $100 purchase.

About $20 million of the increase is dedicated to undefined mental- and behavioral-health programs. Much of Thursday’s testimony focused on the push for those services.

“There is and was no help, no resources,” Mcintyre said through tears, as she explained that her 22-year-old daughter had died, leaving a child behind. “We reached out to anyone we could think of.”

The remainder of the money raised by the new tax – around $10 million – would go toward general county operations. It’s intended to offset about $10 million in state funding that will be phased out over 15 years. The county will lose about $800,000 next year, unless the state Legislature accelerates the phase-out.

Bernalillo County Commissioner Wayne Johnson, right, gestures during Thursday’s special meeting before commissioners voted 3-2 to raise the gross receipts tax rate by three-sixteenths of 1 percent on the purchase of most goods and services as of July 1. Johnson and fellow Republican Lonnie Talbert, left, voted in the minority. (Dean Hanson/Albuquerque Journal)

Bernalillo County Commissioner Wayne Johnson, right, gestures during Thursday’s special meeting before commissioners voted 3-2 to raise the gross receipts tax rate by three-sixteenths of 1 percent on the purchase of most goods and services as of July 1. Johnson and fellow Republican Lonnie Talbert, left, voted in the minority. (Dean Hanson/Albuquerque Journal)

The $30 million tax increase won approval on a party-line vote of 3-2, with Democrats in the majority.

Republicans Wayne Johnson and Lonnie Talbert said repeatedly that they shared the goal of improving mental-health services. But they assailed the idea of moving forward with a tax before a comprehensive plan for how to spend the money is in place.

“I can’t support this bill because it’s premature,” Johnson said.

Talbert added: “All I’m asking for is something concrete.”

Commissioner Debbie O’Malley, a Democrat, accused them of making excuses to avoid the political consequences of a tax increase. It’s easy to say you support improved mental health care, she said, but it’s hard to find the money.

“It’s always something,” O’Malley said. “You just don’t want to raise taxes because you don’t want it on your record.”

Mental health

Voters overwhelmingly supported the concept of a mental-health tax last year in response to a nonbinding question on the general-election ballot. The ballot measure mentioned a one-eighth of 1 percent tax.

Bernalillo County Commission Chairwoman Maggie Hart Stebbins speaks during Thursday's special meeting. Commissioners voted 3-2 along party lines to raise the gross receipts tax rate from 7 percent to 7.1875 percent as of July 1. (Dean Hanson/Albuquerque Journal)

Bernalillo County Commission Chairwoman Maggie Hart Stebbins speaks during Thursday’s special meeting. Commissioners voted 3-2 along party lines to raise the gross receipts tax rate from 7 percent to 7.1875 percent as of July 1. (Dean Hanson/Albuquerque Journal)

Even supporters of the mental-health tax, however, acknowledge that they don’t yet have a comprehensive, specific plan for spending the money. But they say numerous interagency groups have studied the issue and made recommendations.

The county is seeking proposals from a consultant that will examine the earlier work and develop a plan for spending the money. It’s due to the County Commission by Dec. 1, though it could come earlier and the county will receive regular updates on the work.

Joining O’Malley in favor of the tax increase were fellow Democrats Art De La Cruz and Maggie Hart Stebbins.

De La Cruz vowed to push for repeal of the tax in a year if a comprehensive plan isn’t in place.

Hart Stebbins said she felt pressure to act quickly on the tax out of fear the state Legislature will limit counties’ authority to raise taxes, accelerate the phase-out of state funding or both.

General operations

About one-third of the new tax is dedicated to general county operations, not behavioral health.

The county estimates it could face a shortfall of $40 million to $70 million in next year’s budget if no adjustments are made. The exact amount depends on what assumptions are built into the projection.

One factor is the reduction of about $800,000 in state funding – a category of revenue known as “hold harmless” funding, meant to compensate counties for not taxing medicine and some food. The funding, about $10 million overall, will be phased out a little each year.

About $10 million in revenue from the new tax, then, is dedicated to offsetting the cut.

But Johnson said the county shouldn’t just grab the money through a tax increase. Talbert said it didn’t make sense to raise $10 million in taxes for what is essentially an $800,000 problem for the coming year.

“We could cover that ‘hold harmless’ (reduction) without a tax increase and actually balance the budget ourselves without hitting taxpayers,” he said.

The county’s general-fund budget grew about three times as fast as inflation over a recent five-year-period.

De La Cruz took aim at opponents for saying the county simply needed to tighten its belt and get its finances in order, without offering a detailed plan for fixing the budget.

Important services are at stake, he said.

“Tightening your belt? Is that what you tell someone who needs after-school care?” De La Cruz asked.

Tax scaled back

Thursday’s tax increase is smaller than what the county originally had agreed to consider – a quarter of 1 percent tax that would have raised more than $40 million a year.

Roughly 45 people signed up to address the County Commission. The overwhelming majority spoke in favor of the tax for mental-health services.

Only a handful of opponents testified, including Dale Dekker, an architect and planner who spoke on behalf of the Greater Albuquerque Chamber of Commerce. He said the chamber opposed imposing a new tax before there’s a well-defined plan and “true accountability” for the spending of mental-health money.

Barkoff, one of the supporters, said she adopted a son who had suffered severe trauma. She said he became an addict as he battled mental-health trouble, and it was difficult to find help.

Eventually, she said, she had to get a restraining order to protect the family from him.

“I don’t know whether he’s alive or dead,” Barkoff said. “Please pass this tax. We need the help.”

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