An existing county gross receipts tax will be extended indefinitely following a unanimous vote by the Chaves County Board of Commissioners at a Tuesday public hearing that garnered no public comments or participation.
The commissioners approved a resolution to adopt a new ordinance, O-102, that will extend an existing “Hold Harmless” tax of one-eighth of one percent, or 0.125 percent. The provisions of the original 2014 ordinance, O-089, called for the expiration of the tax in June 2020.
The tax is charged to most providers of goods or services in the county and generally passed on to consumers. It is equivalent to 12.5 cents for every $100 of goods or services purchased. The new ordinance will take effect July 1 and will have no sunset date.
County Manager Stanton Riggs said that the tax, which brings in about $710,000 a year for the county, is necessary revenue and will help the county be able to pay off all debt by August 2019 and still have money for smaller capital projects or other county needs. He also stressed that the ordinance will not raise the county tax rate.
Commissioner James Duffey, appearing at his last meeting, having served eight years on the board, asked a couple of questions about whether the new ordinance should have a sunset date or a provision requiring commissioners’ review every few years.
“My question is, wouldn’t it be good to look at it every two or three years?” Duffey asked.
Riggs responded that the new ordinance gives commissioners the flexibility to rescind the tax if the county no longer needs the income, but provides needed revenue for the time being.
“We need to make sure that this revenue stream stays in place for a few more years,” he said. “As any ordinance of the county, the next commission could come in and have a public hearing and dissolve the ordinance. So we thought there really is no point in having a sunset in it. You just need to come back and if you want to get rid of it, get rid of it.”
He added that county staff and commission members serving on the budget committee do review county taxes every year.
“It has been really hard to get to this spot,” said Commission Chair Robert Corn about becoming debt free, which will be contingent upon the New Mexico Finance Authority agreeing to allow the county to pay off a loan early, in 2019 instead of 2023.
He explained that the county has assumed significant financial burdens over the past decades, which he said was a result of the county either being powerless over state decisions or having to assume responsibility for critical services that the state decided not to fund.
For example, he said, the state took away about $3.14 million from counties by rescinding a Hold Harmless tax on food and medical items.
Then, the county assumed about $478,000 a year in rent and services to provide for mental health services for the indigent after the state voided all contracts with state providers.
The county also pays for “unfunded mandates,” legislative requirements that have not come with funding. For a total of about $2.25 million a year, these items include such things as housing and transporting prisoners and providing offices or facilities for the Chaves County Extension Office, juvenile detention and court and district attorney’s staff. In addition, the state has intercepted money that previously had gone to counties to pay for indigent medical care, which reduced county revenues by about $2.43 million. In 2014, the county also voted to reduce property tax by 1 mill, which reduced revenue by about $850,000 a year, when it was instituting some gross receipts taxes.
“I think we are doing a heck of a job of keeping our end up with all these pressures that are put on by people that we don’t have any control over,” Corn said. “We don’t complain about it. We just pick up the slack and do the right thing, and it is important that people understand.”
Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 311, or at firstname.lastname@example.org.