Wednesday, June 18, 2008

Belen raises its gross receipts tax by 25 cents per $100

Jackie Schlotfeldt News-Bulletin Staff Writer; jschlotfeldt@news-bulletin.com

Belen Belen residents will have to chip in an extra 25 cents for every $100 they spend beginning in January.

In a 3 to 1 vote, the city council adopted an ordinance increasing the gross receipts tax (GRT) by one-fourth of one percent at Monday's regular council meeting.

Councilor Rudy Jaramillo voted no on the increase, saying that although he knows the city needs the extra funding, he thought the item should be put on a ballot so residents would have a say on whether they want the tax increase.

"We need it," Jaramillo said. "I will be the first to say we do. I don't know what the answer is. Maybe the people should decide better than the mayor and council."

While some tax increases are done by referendum, municipalities are allowed by ordinance to increase GRT under the Municipal Local Option Gross Receipts Tax Act, but the funding acquired from the tax is dedicated to specific areas of improvements.

The increase in GRT will generate funding that will be dedicated to infrastructure improvements that include design, repairs, renovations and construction of streets, buildings, storm drainage and water and wastewater facilities. It can also be use for repair or replacement of technology equipment, general municipal purposes and debt services.

Mayor Ronnie Torres said the city has looked to find ways to stretch what funding it has, but it's not enough, and the increase in GRT is to try and continue to grow and improve as a community.

"We're trying to make Belen as good as we can," Torres said. "Camino del Llano Road needs improvements, and we have some funding, but we need matching funding. Once that (the road) is done, it will open it up for a lot of homes."

Torres went on to say they are also trying to get industrial businesses out at the Belen Alexander Municipal Airport, and with the condition of Camino del Llano, they are losing money on the west mesa.

"It's like a catch 22," Torres said. "There's no way to make it better if you don't spend money. We're not trying to gouge our citizens. We've looked long and hard."

Business owner Tom Greer spoke before the council, saying he was a proponent of improving the community but "we already have the highest gross receipts tax in the state." He went on to say tax increases have a cumulative effect on people's abilities to do things and he asked the council to look for other funding options.

Belen Chamber of Commerce Executive Director Cindy Clark said although the increase is not a large amount, the perception of people and where they do business could be affected.

Currently, Belen's GRT is 7.1875, the same as the Village of Los Lunas, but with the approved increase, the tax will increase to 7.4375. However, many municipalities statewide are still higher in GRT than the City of Belen. That includes Taos, Ruidoso, Grants and Gallup, among others.

Resident Gilbert Tabet said when the state decided not to charge GRT on most food bought in grocery stores, they should have included restaurants as well.

Councilor David Lopez said the "no food tax" hurt GRT in every municipality. He said he personally has experienced the increase in costs for products he uses and the city is the same with costs continuing to go up.

"The City of Belen is like a business," Lopez said. "We have to pass (increases) on. It's unfortunate, and I don't like it myself."

Councilor Wayne Gallegos said the timing is not the best because of the state the economy is in now, but funding trends are down and everyone is taking a hit.

"We're still recovering from the flooding we had two years ago, and we need to recognize things (roads and drainage) before they become an emergency," Gallegos said.

Torres added that he thinks raising GRT is fairer than raising property taxes because then all citizens will pay a little bit - not just one group of people.

"It's probably the least painful of taxes, although no tax is painless," Torres said. "We're doing the least amount as possible. There are more taxes we could go up in through a referendum. I got quite a few calls, but when I explained it (the tax) and what it's used for - it's not what they wanted, but they understood."

The new tax increase will not be implemented until January.

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