San Juan County Commission approves gross receipts tax increase on 4-1 vote
AZTEC — Gross receipts taxes in San Juan County will increase following a 4-1 County Commission vote. Commissioner Jim Crowley cast the sole dissenting vote.
The tax increase will go into effect Jan. 1 and the county will start receiving the revenue in March.
The meeting can be viewed on the county’s YouTube channel.
San Juan County is looking at a $4.6 million gap next fiscal year and the increased 1/8 of 1% gross receipts tax will help fill that gap.
Crowley said the tax increase may only be five cents on every $40 spent, but it is on top of the other gross receipts tax rates that have been increasing in recent years. He expressed concerns about how the tax increase could impact the poorest people in the county.
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“We have to look at a long-term plan,” he said. “In some ways this is a one-year fix. And we’ve been working on one-year fixes for at least five years and we have trimmed greatly.”
He said the county offers services that many counties throughout the state do not provide.
The pandemic has decreased gross receipts tax revenues by 16% this year and the gross receipts tax revenue was down even before COVID-19 hit. Gross receipts tax is similar to a sales tax and is the county's main source of revenue.
One reason that gross receipts taxes are down is that there have been changes in the energy industry. The major oil and gas companies have left the basin and the future of coal-fired electrical generation is uncertain.
But the decision to raise the tax wasn’t easy, especially as members of the public expressed concerns about the increasing tax burden. Several residents contacted commissioners to ask them to cut expenditures rather than raise taxes. Commission Chairman Jack Fortner said that he is philosophically opposed to tax increases, but he also values services that the county offers including McGee Park.
“Are there enough programs that we can cut to make up the $4.6 million?” asked Commissioner John Beckstead.
County Manager Mike Stark said there would be significant cuts in service. This could have meant eliminating spraying for mosquitoes and closing McGee Park and the Riverview Golf Course. Stark said it could also require closing some trash transfer stations, which would lead to increased illegal dumping of trash.
In terms of the Sheriff’s Office, Sheriff Shane Ferrari said the helicopter would likely be the first thing eliminated. But other things that are not mandated, including the internet crimes against children program, could be cut as well. But even eliminating or cutting non-mandatory programs will not bridge the 11% gap, Ferrari said. This could mean not replacing vehicles as often, cutting officer pay or even eliminating positions.
At the same time, Ferrari said the legislative session in January will likely increase the mandates for law enforcement officers and that could lead to more expenses. In the special session this year, a bill was passed that required all law enforcement officers to wear body cameras and the county was given 90 days to equip the Sheriff’s Office deputies with these cameras. However, there was no funding provided.
“I have no doubt that the State of New Mexico is going to require more of our county and municipalities,” Ferrari said.
Commissioner Mike Sullivan, who made the motion to approve the tax increase, said he would much rather keep the level of services that the county currently provides.
"Right now, I think it's a good move," he said.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at firstname.lastname@example.org.
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