AZTEC — Commissioners decided Tuesday to ask voters whether the city should use a percentage of its gross-receipts taxes to encourage development of the town's private retail businesses.
In New Mexico, the use of public money to support private enterprise is severely restricted by the state Constitution's "Anti-donation Clause." However, another law, the Local Economic Development Act, or LEDA, was created to allow such use in certain circumstances but was aimed at larger manufacturing projects that promised the most jobs.
The discussion in Aztec was spurred by changes in LEDA's language made during last year's legislative session to allow such financial support for smaller retail businesses in rural communities of 10,000 people or fewer.
"The purpose of LEDA is to give local governments a tool to access their own funds or to potentially pull down money from the state to make economic development projects work," Mayor Sally Burbridge said. "The problem in the past is that the definition of allowed businesses has been so narrow that they couldn't qualify. We got a change to the statute for retail businesses. However, the caveat is that we have to pass it in an election, to get approval from voters to use (general fund money) for retail. This is important for us, and for small communities across the state."
Burbridge, who sits on the town's Economic Development Advisory Board, a group that informs commissioners on economic matters including LEDA funding, sees the money as necessary for economic development in a city like Aztec with retail sectors composed mostly of small businesses.
"The reality is that we're not going to have very large employers come into Aztec any time soon, so if we can assist our existing businesses (to) grow and expand, even if they're small retail employers, that's a win," she said.
Without major corporations or big box stores within city limits, officials said, Aztec has to get creative. The Anti-donation Clause excludes public money going to oil and gas industries, but if a local business needs an upgrade of its electrical utility or building expansion, the city could allocate up to 10 percent from its annual budget to help new businesses get started or existing businesses expand.
But most businesses don't approach the city for assistance early enough, Burbridge said.
"One of the things that happens a lot, we see businesses that want to expand. They do all the work they need to do and put everything all in place before they come to the city. Very seldom do businesses approach us early on. When they do that (wait), they bypass potential support that's ideally part of the business planning process," she said. "We want to get the word out that we want to help businesses get started and grow and this is one more tool to do that."
The question likely will appear on a ballot sometime after March 4, commissioners said.
City Manager Joshua Ray supported the plan.
"I'm very confident, long term, that this helps in a big way," Ray said.