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Eddy County tax rebellion advancing to ballots; Petitioners meet thresholds to force special election on sales tax increases

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A full-blown tax revolt is unfolding in Eddy County where voters spurred on by Artesia leaders have met the minimum threshold to force a special election to decide if sales taxes approved by the Eddy County commissioners should stand.

Eddy County Clerk Robin Van Natta said the countywide election would be held in the next two months, and would cost the county about $52,000.
The tax revolt is in response to gross receipts tax increases approved by the Eddy County Commission at a special meeting in late May.
One of tax increases, passed by the Eddy County Commission on May 25 by a 4-1 vote, would impose a one-eighth of 1 percent gross receipts tax to build a new Eddy County Detention Center.
Another ordinance, which was passed by the Eddy County Commission on May 25 by a 3-2 vote, would impose a one-eighth of 1 percent general purpose gross receipts tax.
The Eddy County commissioners also passed a third tax increase at their May 25 meeting, which will impose a one-twelfth of 1 percent levy to be paid into a newly created Safety Net Care Pool Fund, although it has not run into the buzzsaw of opposition met by the other two tax increases.
Collectively, the gross receipt tax increases would add an extra 33.3 cents of sales taxes for every $100 spent on goods and services that are subject to GRTs. All three GRT increases are set to take effect Jan. 1.

Artesia insurgency
Artesia Mayor Phillip Burch, Artesia City Councilor and mayor pro tem Terry Hill and other Artesia leaders employed a seldom-used state law to spearhead petitions that could nullify the one-eighth of 1 percent sales tax for a new jail, and the one-eighth of 1 percent general purpose gross receipts tax.
The statute requires that petitions from at least 5 percent of Eddy County’s registered voters are needed within 60 days of the passage of a GRT increase to force a special election, or 1,550 voters, based on the last countywide election in Eddy County.
Eddy County Clerk Robin Van Natta told the Daily Record Monday that both petitions had met the threshold.
“They met their number last week,” she said. “They got their required number of signatures on the 24th. They’re done.”
Van Natta said the names of 1,655 Eddy County voters had been submitted on the petition calling for a referendum on the general purposes tax increase, and 1,569 of them were qualified.
She said the names of 1,687 Eddy County voters had been submitted on the petition calling for a referendum on the correctional facility tax increase, and 1,570 of them were qualified.
The petitions state the signatories disapprove of the tax increase ordinances and, “respectfully request by this, our petition, that it be referred to the people of Eddy County, New Mexico, to the end that the same may be approved or rejected by vote of the qualified electors of Eddy County New, Mexico.”

Election method
Van Natta said she would issue a notice of qualification on Thursday. She said balloting could be done by mail, or conducted at traditional polling places.
“I’m recommending an all-mail (election),” she said. “Either way, polling places or by mail is the same — we’ve got to spend a lot of money.”
Van Natta said the special election would cost about $52,000.
“We have to have (the election) within 60 days,” she said. “It has to be held within 60 days after I qualify the signatures, so it’s pretty much in a time crunch. If there were a general election coming in November, then we could hold it in conjunction with that, but there’s not. So it’s going to have to be a special election.”
The method of the election will be up to the Eddy County Commission, whose tax increases prompted the revolt.
“The (ballots) will be sent out, if the commission approves it,” Van Natta said. “Now, that’s totally up to them. They’ll have to approve that method of voting.”
If conducted by mail, Van Natta said ballots would be mailed to every registered voter in Eddy County and voters would have until 7 p.m. on the chosen election day, on a date as yet undetermined, to return ballots.
Van Natta said the Eddy County commissioners are aware the requisite signatures have been qualified.
“They’re thinking about it already,” she said. “They don’t really have too much of a choice. The referendum petitions have been submitted and it’s qualified. They have to call it. There’s not anything they can do about it really.”
Van Natta said a referendum to possibly negate a tax increase is very unusual.
“I’ve been (at the Clerk’s Office) 28 years and I’ve never seen a negative referendum,” she said. “It’s interesting, for sure. It’s definitely going to be interesting.”

Election impact
At the July 11 Artesia City Council meeting, Burch asked city councilors to take petitions to their neighbors, friends, relatives and other registered voters to sign.
Burch predicted voters would reject the tax increases.
“Because I am convinced, in talking with people in the community, that if it gets on the ballot, it will be defeated,” he said.
Burch was also critical of the process in which the three ordinances were passed by the Eddy County Commission at the special meeting the morning of May 25.
“Those votes were taken and that was passed on a special meeting called on a Thursday at 8:30 in the morning, which most of the public is working about that time,” the mayor said.
Eddy County’s current gross receipts tax rate is 5.875 percent, of which the county collects 1.0833 percent for every $100 spent. If all three tax increases are imposed, Eddy County’s tax rate would increase to 6.2083. Chaves County’s current GRT rate is 6.4375 percent.
Municipalities also impose their own GRTs, tacked on to the state and county rates. Artesia’s rate is currently 7.8125 percent, Carlsbad’s is 7.5625 percent, Hope’s is 6.75 percent and Loving’s is 6.9375 percent.
Eddy County assistant county manager Kenney Rayroux said each of the one-eighth tax increases is estimated to generate $3.3 million annually. He said the detention center currently costs the county about $13 million a year to operate, and a new one could cost as much as $70 million.
Editor Jeff Tucker can be reached at 575-622-7710, ext. 303, or at editor@rdrnews.com.

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