AZTEC — San Juan County commissioners during their Tuesday evening meeting imposed a new tax but dropped another of equal value.
"I know how hard it is on commissioners for this decision," GloJean Todacheene said before the body passed the ordinance to adopt the tax. "We have to comply with the state on this."
Commissioner Scott Eckstein made the motion to approve the new tax, and Todacheene seconded it. Commissioner Margaret McDaniel opposed the motion.
Commission Chairman Jack Fortner and Commissioner Keith Johns were absent.
County Executive Officer Kim Carpenter said shoppers won't notice a change with the new tax, as it is the same value as the tax the commission dropped.
The new tax could become effective Jan. 1, and the old tax will be dropped then.
Both are a one-eighth of 1 percent gross receipts tax. The gross receipts tax imposed on sales and services in the county, excluding food and medicine.
In 2003, the county imposed the tax that will be dropped to fund improvements to San Juan Regional Medical Center. Those improvements included building the hospital's east tower and renovating its first and third floors and its emergency room, Carpenter said.
But the project's construction bonds are now paid, he said, as the tax generated more revenue than was expected.
Eliminating the tax would have cut 2.5 cents in taxes for every $20 spent by shoppers. But commissioners felt they needed to create the new tax to recover expected revenue losses resulting from a law passed by state legislators eliminating the so-called "hold harmless" payments.
The hold harmless payments from the state were created to make up for gross receipts tax exemptions lawmakers had previously approved for food and medicine. The legislation passed in 2013 phases them out over the next 15 years.
Carpenter said the one-eighth of 1 percent gross receipts tax levies 2.5 cents on every $20 in purchases.
"For every 20 bucks you spend," he said, "it's two-point-five pennies of a difference."
The new tax is projected to garner the county $4.3 million a year, Carpenter said. But that is a "volatile projection," he said, as the stock market and other "outside sources" influence how much people spend, which changes the amount of tax revenue.
The county also lost property taxes from Navajo Mine and gross receipts taxes when the Four Corners Power Plant closed three of its stacks. The county will lose more revenue when the San Juan Generating Station closes two of its stacks.
Carpenter said of the 33 counties in the state, 17 have tax rates that are equal to or higher than San Juan County's.