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Bernalillo County to increase gross receipts tax

ALBUQUERQUE, N.M. — Bernalillo County Commissioners voted 3-2 on Tuesday night to impose an increase in the gross receipts tax in the county by an estimated $30 million a year, but an amendment earmarks a third of that new money to the county’s public safety agencies.

“It’s not easy for any of us to do this, to make this decision,” said Commissioner Maggie Hart Stebbins. But she said providing services to county residents takes money.

The increase of three-sixteenths of 1 cent on the GRT doesn’t require approval from voters. A gross receipts tax – which is similar to a sales tax – is tacked onto most goods and services purchased in the county. The new tax will add 18.75 cents to the cost of a $100 purchase.

The increase goes into effect on July 1.

Proposing the tax hike to commissioners was County Manager Julie Morgas Baca, who said she was bringing the measure before them out of necessity.

“I understand that this is a hard decision and that it impacts the public,” she said.

Morgas Baca said the increase is needed to stabilize county operations. She said the county is dealing with increases that it has no control over – such things as insurance premiums. She said the county also needs to replace sheriff’s vehicles, heavy equipment, and it needs to cover the costs of software and hardware upgrades.

Morgas Baca said the county also stands to lose $10 million in hold harmless payments, funding the state has been providing to cities and counties to compensate them for revenue they lost when the state eliminated the tax on food and medicine. The county manager said she was also worried that the state could halt the county’s ability to impose GRT increases for up to two years. And she warned that if they decided against raising the GRT, the county would be forced to institute an immediate hiring freeze and mandatory furloughs, eliminate vacant positions and take other steps to balance the budget for the coming fiscal year.

Commissioners split along party lines with Democrats Stebbins, Steven Michael Quezada and Commission Chairwoman Debbie O’Malley voting for it and Republicans Wayne Johnson and Lonnie Talbert voting against it.

“Until we get our spending under control, it makes no sense to reach into people’s pockets,” Johnson said. “I disagree morally with what we’re doing.”

Tom Lewis

Tom Lewis

Speaking against the tax increase was Tom Lewis, a former state senator from Albuquerque. Lewis said the county’s financial situation isn’t so dire that it has no choice but to raise the GRT.

“When I was in the Legislature in the ’80s, the GRT was between 4 and 5.5 perercent,” he said. “Now it’s over 7 percent. … They all add up in the end. At some point we have to say stop.”

Paul Gessing

Paul Gessing

Paul Gessing, president of the Rio Grande Foundation, a research group that advocates limited government, urged commissioners to vote against the increase, arguing that “tax increases do real economic harm.” He said that, at a minimum, the Commission should let voters decide.

But not everyone was opposed.

Sgt. Colleen Bultmann, speaking on behalf of the Bernalillo County Sheriff’s Office union, said sheriff’s deputies have been asked to do more with less for the past several years, and it’s time to properly fund the agency.

“We’re here in support of the sales tax increase,” she said.

Bernalillo County Sheriff Manny Gonzales told the Commission that from 2012 to 2016, calls for service have increased by 82 percent, yet his agency is still operating at the same staffing levels.

Gonzales also raised concerns about the condition of police vehicles and the lack of money to replace them.

O’Malley made the motion to dedicate a third of the expected tax revenue for public safety operations, and the amendment garnered unanimous support from commissioners.

The tax increase consists of two separate hikes.

The first imposes a one-eighth percent increase. That will bring in an estimated $20 million a year and is authorized by the state to compensate cities and counties for revenue lost when the state exempted gross receipts taxes on food and medicine. The second part of the increase reimposes a one-sixteenth percent gross receipts tax that was repealed by the commission in 2015. That measure will bring in about $10 million a year in new revenue, which will be dedicated to public safety agencies.

The GRT rate in Bernalillo County will increase from 7.3125 percent to 7.5 percent in the city and from 6.25 percent to 6.4375 percent in the unincorporated part of the county.