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Dona Ana County Commissioners are debating a Hold Harmless Gross Receipts Tax increase between 1/8th and 3/8th’s of a percent, to recoup the funds they are losing in state funds. In 2004, New Mexico State Legislature eliminated taxes for many food and medical purchases, instead making “Hold Harmless” payments to counties and cities.
A phase-out of those payments began last year, and the county now has the ability to increase the counties GRT tax.
The Dona Ana County commission is trying to determine how they are going to make up for the almost 2 million dollars lost from the “Hold Harmless” payments from the state. Commissioner Billy Garret says this is not the only change in the way the county receives funds.
“We’re in a very volatile situation right now in terms of different kinds of revenue,” Garret says. “Grants have dropped significantly, and a lot of the revenue that used to go into the county sheriffs' department came from grants, so we’re trying to make up for that shortfall. At the same time we’ve got expanding expectations on us.”
Garret says many people throughout the county want to spend money on projects ranging from roads to economic development, but they need to have the money in order to fund the projects.
“We just need to figure out what’s fair and how to deal with the service levels that are expected of us,” Garret said. “We’re talking about very basic kinds of issues right now. I keep asking ‘well, what do you want me to cut?’ and there aren’t too many people who have actually come up with suggestions about what to cut.”
Many spoke out against increasing taxes at the Dona Ana County Commission Meeting. Troy Tudor, Vice President of the Greater Las Cruces Chamber of Commerce says that the tax increase will hurt local business.
“Businesses are under a lot of pressure right now, the economy is not moving along very well locally,” Tudor said. “The affordable care act is going to be another level coming in in 2015. We just had the city’s GRT tax go up; we have pretty high impact fees in this city. So, they’re already under a lot of pressure to succeed, and the weight is getting to be too much to bear.”
He says it is difficult for local business to compete with businesses in Texas that have a lower tax burden.
“A lot of our own folks, here, in this town for example no longer do business in our own community,” Tudor said. “They are doing business in either other parts of New Mexico, or Texas, or somewhere else. We need to kind of roll back some of those layers that we’ve built on, and some of those things that we’ve done that have made it difficult for them to succeed. And take the shackles off, so that they can go forward.”
The first reading of the tax increase passed in the county commission, creating a public notice that a tax increase will be voted on by the commission on March 24th. Commissioner Garret says this gives the commission time to make an informed decision.
“Now we have about six weeks, where we can really get into the budget, really understand this,” Garrett said. “If we are able to cut things, and make do with what we have, and what we project, I’m fine with that. If we need a 1/8th then that’s what we will have to take a look at. We authorized the 3/8th’s simply because that’s the maximum. I don’t think there is anyone on the commission that’s actually thinking that 3/8th’s is where we want to go.”
The first reading passed by a vote of 3-2 with commissioners Ben Rawson and Dr. David Garcia voting against. County Manager Julia Brown said that an increase of 3/8th’s is recommended to keep up with services.
