By Jack King
Curry County is facing a $200,000 shortfall in its 2002 budget and may have to increase taxes to cover it, County Manager Geneva Cooper told the commission Tuesday.
To cover the shortfall, the county could increase property taxes by 1 or 2 mils of value or increase gross receipts taxes by one-eighths percent.
A 1 mil increase would generate $400,000 and could be enacted by resolution, without a vote by county residents. A one-eighths percent gross receipts tax increase could generate $750,000, but would require a vote by county residents, Cooper told county commissioners.
Cooper suggested that if the commissioners wanted to put a gross receipts tax increase before voters, they could put it on the ballot during a Sept. 23 special election that will seek voter approval for two proposals by Gov. Bill Richardson and will be partially paid for by the state of New Mexico.
However, Bureau of Elections administrator Coni Jo Lyman said if the commissioners want to ready an ordinance for voter approval on the Sept. 23 ballot, they must act quickly. Preparing an ordinance for presentation on the ballot could take several weeks, Lyman said.
“A proposed ordinance must be publicized for two weeks prior to adoption, then it can’t take effect for 30 days. Then the election has to be held within 75 days of the date the ordinance is adopted,” she said.
Commission Chairman Tim Ashley said a tax increase is necessary to cover the shortfall and prevent the county from dipping into its reserves, which can harm its borrowing capacity. He said, while a gross receipts tax distributes the tax burden more fairly, a property tax increase would take care of the county’s problem immediately.
Commissioner Pete Hulder said he opposes tax increases and suggested the county cut expenditures and dip into its reserve. If a tax increase is still necessary next year, he would approve it, he said.
Commissioner Albin Smith asked Cooper to research instituting a property tax increase that could be rescinded in two years. He also suggested taking money from county’s reserve to cover the shortfall, then replacing the money if county residents approved a gross receipts tax increase.
Cooper said the shortfall is the result of falling income from the county’s investments since Sept. 11, a 16 percent increase in the cost of insurance for county employees and the increased costs of housing and caring for an unexpectedly large number of prisoners this year in the county detention center.
“In past years, income increases grew just enough to cover expenditures, but not this year,” she said.