The New Mexico Business Coalition has repeatedly warned that increasing the GRT was not in the best interest of Las Cruces, which has on of the highest GRT rates in New Mexico at 8.3125 percent. The tax rate was 7.5625 percent on June 30, 2014, and has increased twice since then.
Why has the City Council raised the GRT? Because most of the 2013 councilors claimed they needed to make up the difference for lost revenue from the phase-out of a state subsidy which had replaced the food tax.
State legislators passed the law in 2013 that would phase out the state food tax subsidy over 15 years, beginning July 2015. That means Las Cruces did not lose any of the subsidies through the end of June 2015, but Las Crucens saw their first GRT increase in July of 2014 – one year before the phase-out started.
Las Cruces City Manager Robert Garza estimates the city will take in about $68 million in surplus revenue over the 15 year period of phase-out. He says it’s necessary because after the phase-out is complete, he estimates the city will be losing over $12 million per year, and if they don’t increase GRT now, they would never catch up.
It’s sad that some elected and appointed officials can’t find ways to spur economic development to grow the pie. Instead, they want to slice the pie thinner for New Mexicans, while taking more for government growth. When you look at the economic activity in Santa Teresa, you know there are ways to bring business to this great state. The living proof is at your doorstep.
If you look at what Las Crucens want and what they think makes sense, an increase in GRT isn’t it. In a special election on July 30, 2013, Doña Ana County voters clearly defeated a GRT tax increase. So how did the council believe they were representing the interests of their constituents by raising GRT?
NMBC has written about this issue on numerous occasions, each time requesting the Las Cruces City Council give careful consideration to the needs of their constituents. While the need to replace lost revenue is understandable, struggling families going through some of the toughest times of their lives can probably do better with that money in their pockets rather than in the government coffers.
The City Council is currently sitting on a windfall of money that should have been left in business and household budgets. The GRT increase was intended to cover operational shortfalls, not act as a source of new spending. And remember, if the money is used to build a new facility, additional money will be needed to cover the costs for staff, programs and maintenance among other things.
The NMBC again encourages the Las Cruces City Councilor to stop raising taxes that are a deterrent to business and a hardship for citizens. Instead, encourage businesses to come to your beautiful city or expand. It can be done right, and when it is, everyone wins.
We encouraged voters to hold councilors accountable in the last election and as a result, Ceil Levatino, who is against increased taxes, was elected. The GRT increase was supported by Mayor Ken Miyagishima and every city councilor serving in 2013 except one – Miguel Silva. Silva voted against raising the GRT and is now running for mayor against Miyagishima.
When you vote on Nov. 3, and we hope you will, please consider in every race which candidate will best represent your interests.
Carla J. Sonntag is president and founder of the New Mexico Business Coalition, a statewide nonprofit association that works to improve the business environment for companies and the quality of life for all New Mexicans.
Published in the Las Cruces Sun-News on October 4, 2015.