Wednesday, September 22, 2010
Lincoln County Sales Tax Increase Passes
By Rene Romo
Copyright © 2010 Albuquerque Journal
Journal Southern Bureau
LAS CRUCES — Lincoln County voters approved a three-sixteenths of 1 percent sales tax increase touted as a critical step in keeping the Ruidoso Downs racetrack and Billy the Kid Casino operating in the area as mail-in ballots were tallied Tuesday.
Racino owner R.D. Hubbard vowed to move the track to Las Cruces or some other New Mexico city, if voters failed to approve the tax increase in a special election paid for by a local political action committee called the Committee for Lincoln County Economic Development.
According to unofficial results from the Lincoln County clerk's office, the tax measure was approved by 52.9 percent of 7,018 votes counted, a 54-percent turnout. Votes in favor of the tax increase totaled 3,719, with 3,299 votes against, according to unofficial results.
The special election fueled a divisive debate. Boosters argued the sales tax increase was a small price to pay to support a major tourism draw touted as critical to the local economy, while opponents balked at having to help bail out a millionaire racino owner.
The estimated $750,000 generated annually over the tax increase's five-year term will be used to offset gaming taxes the state collects from the Billy the Kid Casino at Ruidoso Downs. The increase will cost consumers $18.75 on purchases of $10,000, and supporters said much of it will be paid by tourists visiting the town in the Lincoln National Forest where many Texans own second homes.
Since 2008, Hubbard and his backers have lobbied the state Legislature for what was called "tax equity," a reduction of the tax on the racino's net that would compare more favorably to that imposed on Indian casinos. Net win represents the amount of money bet on slot machines, minus payouts and regulatory fees.
The state taxes net profits at Indian casinos on a tiered basis from 3 to 9 percent, depending on the volume of revenue, but non-Indian casinos, like Hubbard's, pay a flat 26-percent rate.
The racino claimed it lost $1.2 million in 2009 and $2.2 million in 2008, mainly due to competition from two casinos operated by nearby Mescalero Apache.
The pro-tax PAC, headed by the attorney for the city of Ruidoso Downs where the track is located, characterized the sales tax increase as a "business retention" tax and campaigned with the slogan: "Fight Back — Vote Yes for Lincoln County." The PAC was opposed by another group of locals called the No Bail Out Tax Committee.