How do you fill an $8 million budget deficit? If you’re Bernalillo County the answer is simple – impose $30 million in new taxes!
Today, the Bernalillo County Commission will take final action on its latest tax increase, an increase that will impose an additional 3/16ths-of-a-cent tax on every purchase made in the city of Albuquerque and Bernalillo County.
If passed, gross receipts taxes in the city of Albuquerque will go from 7.3125 percent to 7.5 percent. In fact, county gross receipts taxes have increased of 13 percent since 2010.
So how did we get here?
Back in 2013, the state Legislature granted cities and counties additional taxation authority to make up for lost “revenue” due to the phase out of the “hold harmless” payments, which were begun in 2006 to make up for lost “revenue” from the removal of the gross receipts tax on food and medicine.
Simple, right?
In other words, the lost taxes to cities and counties from food and medicine gross receipts were paid for by the state until 2013, when the Legislature decided that the state budget could ill afford continued “hold harmless” payments to their local brethren and started a 15-year phaseout of payments.
As they did back in 2005 when this whole mess began, the 2013 Legislature bought off – or rather cut a deal with – local governments that would allow them to impose their own replacement taxes to make up for lost “hold harmless” revenue from the state.
The only problem is that the Legislature gave local governments six times the taxation authority necessary to make up the difference.
In 2015, the Bernalillo County Commission – over my objection – chose to impose a 3/16ths-of-a-cent tax that generates approximately $30 million in new “revenue” to replace the $10 million of “hold harmless revenue” from the state.
Now, the commission is considering sticking their hands back into your pockets to grab the rest of the $60 million they didn’t get the first time around.
The argument from county management is that we need additional “revenue” to be able to continue to provide basic services – an argument I do not buy, and this is why:
Last May, Bernalillo County was looking at a $17.7-million budget deficit. We were able to bridge that gap in a long and tedious commission meeting. It was hard work, but we owed it to the public to find a way to live within our $248-million means, and we did.
The good news is that this year’s deficit is just $8 million, and the county has made progress in reducing operational expenses. However as the very existence of a deficit shows, we’re still not where we need to be.
This is where staff hits the easy button.
It’s easy to have the commission impose a new tax. It’s easy to say “it’s just 19 cents on every $100.” It’s easy when imposing a new tax generates a $22-million windfall.
Raising taxes is always government’s easy way out. Unlike private businesses, Bernalillo County can make each and every one of us pay more for almost everything we buy, every time we buy it, in order to make up for its own financial condition and/or mistakes.
The simple fact is you can’t tax your way out of a spending problem, and I cannot and will not support balancing the county budget on the backs of an already overburdened public.
