Recover password

Bernalillo County commissioners to discuss proposal for new GRT increase

Copyright © 2017 Albuquerque Journal

Bernalillo County commissioners will begin discussions today on a proposal that would increase by an estimated $30 million a year the gross receipts taxes that people pay for most goods and services purchased in the county.

If enacted, the proposal would boost the county’s tax rate on gross receipts – a tax similar to a sales tax – by three-sixteenths of 1 percent on each purchase starting July 1. Revenue would be used for general county operations.

It comes less than two years after the county raised the gross receipts tax an identical amount. The new tax would cost nearly 19 cents on a $100 purchase.

The proposed tax increase would not require voter approval. Commissioners have authority under state law to approve such a tax without a public vote.

The earliest commissioners could approve the proposed tax increase would be at their March 28 meeting. Commissioners today will consider only a “notice of intent” to impose it.

The tax increase is being proposed by county administrators to cover the costs of county operations without further spending down the general fund balance.

County Commissioner Wayne Johnson

County Commissioner Wayne Johnson

County Commissioner Wayne Johnson, said Monday the proposal demonstrates that Bernalillo County lacks adequate control over spending. The county has an operating budget of nearly $250 million a year.

“What we have not done is get (spending) under control, and that what this tax increase is really admitting,” Johnson said.

Instead, the county for years has drawn down its fund balance to cover recurring costs, such as salaries and benefits, he said.

Budget records show that the county’s general fund balance peaked at $207 million in 2012 and dwindled to $131 million in 2016.

Several problems have contributed to the county’s budget woes in recent years, including a $17 million loss in its investment portfolio and the high cost of housing inmates in other counties to comply with a court-ordered cap at the Bernalillo County Metropolitan Detention Center.

Bernalillo County last raised its gross receipts tax rate in 2015 – by three-sixteenths of a percent, an amount identical to the proposed increase.

The 2015 increase included a one-eighth percent gross receipts tax earmarked for mental health and substance abuse treatment.

The proposed tax increase consists of two separate hikes, both of which would start at the same time.

The first would impose a one-eighth percent increase that would raise an estimated $20 million a year. That increase is authorized under state law to compensate cities and counties for revenue lost when the state exempted gross receipts taxes on food and medicine.

The second portion of the proposal would reimpose a one-sixteenth percent gross receipts tax that was repealed by the Bernalillo County Commission in 2015. Restoring that amount would raise an estimated $10 million a year.

Meanwhile, state lawmakers are considering a sweeping proposal to overhaul New Mexico’s gross receipts tax by getting rid of most exemptions and lowering base rates.