Commissioner hopes to repeal tax early
FARMINGTON – A San Juan County commissioner says he wants to spur the local economy and help residents by repealing a tax he previously voted to approve.
Jack Fortner led a discussion at Tuesday's County Commission meeting about repealing a 1/16th of 1 percent gross receipts tax that commissioners approved in 2014. Money collected from the tax went toward a $6 million deficit in a fund that helps pay for uninsured health care. If the commission approves the early repeal of the tax, residents would no longer pay it starting this spring after the state approves the change.
The tax, known as the county health care gross receipts tax, was one of two the commission approved that year to pay off an unexpected deficit that occurred in part due to the county being obligated to pay 1/12th of 1 percent of its gross receipts taxes to the state-mandated Safety Net Care Pool.
The county health gross receipts tax is scheduled to expire at the end of this year.
According to the county budget, the tax raised approximately $699,000 in fiscal year 2015. The budget does not estimate how much revenue the tax could generate during fiscal year 2016.
“We need to provide people some kind of tax relief,” Fortner said when reached by phone Wednesday.
While Fortner said he opposes tax increases, he voted for the tax in 2014. In 2014, Fortner told The Daily Times that the county could lose hundreds of jobs and health care services if the tax was not approved. He said he no longer feels the tax is necessary to help the indigent health fund because more people are enrolling in New Mexico’s Medicaid program.
"We've been very aggressive with trying to get people on Medicaid," County Executive Officer Kim Carpenter said .
Carpenter said repealing the tax would not necessarily create huge problems for the indigent fund.
“We have a little bit of reserves in that fund that would sustain it for a short amount of time,” he said.
While County Commission Chairman Scott Eckstein voted against the tax to begin with, he questioned what it would do to the county’s budget if the tax is repealed early during Tuesday's commission meeting. The budget is one of the things commissioners will have to consider during the meeting in February when they discuss repealing the tax.
Carpenter said the county is looking at a deficit in 2018 even if the tax is not repealed. While the tax sunsets at the end of the year, he said the tax could help the county build up additional reserves if it is not repealed.
"Any time you can cut taxes, that's a great thing for residents," Carpenter said.
He added that losing the revenue from the tax would force the county to be "more creative with budgeting."
Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.