State budget, revenue package has minimal impact on local budgets

Governor signed legislation on Friday

Hannah Grover
Farmington Daily Times
A pumpjack operates in Farmington. State sales of oil and gas leases on state lands are skyrocketing, a direct contrast to activity in San Juan County on federally-controlled lands.
  • Several proposed tax increases were vetoed, including an Internet tax.
  • Farmington City Manager Rob Mayes says the special session seemed to result in the status quo.
  • Aztec City Manager Joshua Ray says his city was hoping for the food tax to be reinstated.


FARMINGTON — With a state budget finally in place, local government officials say the recently concluded special legislative session will have a minimal impact on their municipal and county budgets. 

On Friday, Gov. Susana Martinez partially approved bills that set the state's budget and revenue package. She also vetoed several tax increases. Among these proposed increases were a fuel tax and an Internet sales tax. The special session concluded today in Santa Fe.

"Some of the anticipated hits that we were concerned about didn't happen," County Executive Officer Kim Carpenter said.

Bloomfield City Manager Eric Strahl said going into the special session, city officials were concerned about possible changes in gross receipts tax revenue and impacts to so-called "hold harmless" payments, which are distributed to local governments in lieu of revenue from food tax.

Farmington City Manager Rob Mayes said the special session seemed to result in the status quo.

He said he is disappointed the session did not bring about meaningful tax reform that would have eliminated special-interest loopholes and allowed for lower tax rates. Farmington officials favored reinstating the food tax if it was part of a tax reform package that would have allowed for lower overall tax rates.

Mayes said he also was disappointed when Martinez vetoed the Internet sales tax. In her executive message, Martinez said the Internet sales tax was "poorly crafted and could cause more harm than good."

Aztec City Manager Joshua Ray said his city also was hoping for the food tax to be reinstated.

The struggles of the oil and gas industry in the San Juan Basin have led to budget problems for most local governments.


"That would have had a significant impact on Aztec," he said.

Without major changes to the tax structure, Ray said Aztec will see a minimal impact to its finances this year. While that is good news for the city's fiscal year 2018 budget, Ray said it could be bad news next year.

"We're really just banking on oil and gas recovering this year," he said.

Carpenter is concerned about future economic problems related to the energy industry, such as Public Service Company of New Mexico's plans to pull out of the San Juan Generating Station.

"We are looking at some issues down the road regardless with the loss of (PNM's) power plant," Carpenter said.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.