More money is always welcome when it comes to paying the bills at the city and county levels.
But the upcoming state legislative session still looms.
Revenues from gross receipts taxes (GRT) increased 2.6 percent from 2009 to 2010, according to totals released from the city.
That follows a 1.99 percent drop from 2008 to 2009.
“We have been hoping to stay (at least) flat,” Clovis City Manager Joe Thomas said. “We’d always like it to go up, but with the national situation either way, we figured going 1 or 2 (percent) either way, we’d be OK.”
New Mexico does not have a sales tax, but has a gross receipts tax for most purchases.
The city brought in $22.2 millon in GRT in 2010, up from $21.6 million in 2009 and $22 million in 2008.
It might not matter if there is repeal of the state’s “hold harmless” provision. The provision was put in place when the GRT was removed from food and some medical services under form Gov. Bill Richardson’s initiative in 2004.
The Legislature promised to hold local governments financially harmless for those changes at the state level.
Clovis estimates “hold harmless” means about $2.5 million annually to the city. The city commission recently sent a resolution to the Legislature about not cutting the approximate $120 million in statewide hold harmless payments to local entities.
State lawmakers will be struggling with a budget gap that could be between $200 million and $400 million when they convene Thursday. By law, the Legislature can only approve a balanced budget.
County Finance Manager Mark Lansford said the county received $402,785 for “hold harmless” in what it calls an equalization payment.
“What we’re hearing out of Santa Fe is under the Richardson administration, they were going to phase that out over a number of years,” Lansford said, noting the equalization payment dropped by about $100,000 from last year. “We have been in contact with the Martinez administration (about it).”
The city and county, Thomas said, are revenue inverses. The city gets most of its revenue from gross receipts taxes and little from property taxes. Lansford said 54 percent of the county revenues are from property taxes, and 36 percent comes from GRT, for a county budget ($11.8 million) less than a quarter of the city’s ($52.9 million).
“It’s a huge deal to us, don’t get me wrong,” Lansford said, “but it’s a much bigger deal to the city.”
For the county, hold harmless is a difference between a 1 to 2 percent rise or a similar drop in revenues. For the city, Thomas said, it’s the difference between a slight gain and a 12 to 13 percent drop.
Thomas is hopeful that, with or without hold harmless, revenues from GRT continue to go up.
“We, of course, are hoping they continue to increase,” Thomas said. “We won’t see increases like we saw a few years ago when they were in the 6, 7 percent range. We feel relatively comfortable they will continue to increase incrementally.”
|Year||City GRTs collected*||% change**|
|* In millions
** From previous year