Sunday, March 25, 2007
Mayor to Propose $18 Million Tax Cut
By Jim Ludwick
Journal Staff Writer
Mayor Martin Chávez is ready to propose an $18 million tax reduction when he submits his city budget plan at the end of this week.
The tax cut would take effect Jan. 1. It would be an eighth-cent reduction in gross-receipts taxes, the equivalent of $70 per household annually.
Administration officials believe city revenue growth will be stronger than previously expected during the current fiscal year, which ends June 30. Their estimates suggest gross-receipts taxes will grow 7.5 percent, compared with an earlier projection of 5.3 percent.
In the mayor's view, that would make it feasible to roll back taxes slightly while still spending additional money on police recruitment and certain other priorities.
The full details of the budget plan are expected to be unveiled Friday.
"I think it is time, for at least a year, for the city to change course financially," Chávez said. "Frankly, we've done a good job and we have extra money. ... We can give tax relief to working families."
Chávez said officials "can always find ways to spend money at City Hall, but it takes responsibility and discipline to understand the proper role of the government. I would hope that most politicians would agree tax relief is in order."
City councilors gave mixed reviews Saturday to the idea.
"I think a tax cut right now would be like pulling a rabbit out of a hat," said Sally Mayer. "I'm in favor of cutting taxes as long as we don't cut services, but I just don't see how that can be done."
Ken Sanchez said he'll be anxious to look at the overall budget proposal. Previous forecasts have suggested the city might need to tighten its belt in the next several years, he said.
"I'd have to look at it. Based on their forecasts, I have concerns," Sanchez said.
Craig Loy said the possibility of a tax cut is good news.
"My first reaction is that I think it's great," he said.
"I know people will say we need to look at the big picture. But any time you have a pool of money, you can find ways to spend it. I think we ought to give it back."
Under the plan envisioned by the Chávez administration, the budget proposal will call for an overall reduction in city spending through the general fund. It will suggest a budget of roughly $484 million, compared with estimated spending of $497 million in the fiscal year that's now under way.
The city reduced taxes on Jan. 1 of this year, but it was only meant to offset an increase in taxes that had been approved by Bernalillo County when the county assumed responsibility for the jail. The city tax reduction, like the upcoming proposal, was an eighth-cent decrease in gross-receipts taxes.
Last week, councilors narrowly approved the repeal of an extension of a city tax for transportation a quarter-cent gross-receipts tax.
Councilors had voted in November to extend the transportation tax until 2020 instead of letting it expire at the end of 2009 largely to provide money for a streetcar system. Last week's decision restored the plan to end the tax in 2009 while studying the idea of streetcars in more detail.