City, county leaders discuss tax impact
Mayor: Residents don’t want taxes
While some city officials said Thursday they didn’t want to tell the County Commission what to do, Mayor Javier Gonzales made a plea that the commission defer taking action on proposed gross receipts taxes until the two local governments have more discussion on the issue.
During a rare joint meeting between the Santa Fe City Council and County Commission on Thursday, the mayor said he was speaking for many city and county residents who feel they are being nickle and dimed to death.
“No one here more than I understands where the community is when it comes to the issue of taxation,” said the mayor, whose proposal for a two-cents-per-ounce tax on sugary beverages was soundly defeated in a special election last month.
Since that May 2 election, the mayor said he has talked to many people in the community and heard a wide range of concerns about governments’ use of tax dollars.
“But one (concern) that was very clear was this sense that people in our community feel they are just being taxed too much, that there is a natural propensity for government to look to increase taxes to try and solve the problem or the need that is viewed as being a priority,” he said. “There’s a general sense that there isn’t a return in a way that improves their daily lives.”
The County Commission is considering increasing two separate increments of the gross receipts tax that, depending on what they decide, could raise as much as $6.9 million per year to help fund public safety operations — including hiring dozens of personnel for the fire department, sheriff’s office, corrections department and regional dispatch center —
and behavioral health services. Consumers would pay another 19 cents or so on every $100 at the cash register.
The county faces a June 30 deadline to enact one of the tax increases, which would be imposed within city limits, as well as unincorporated county territory. The GRT rate, including levies by the state, cities and the county, is now at 7 percent in unincorporated areas and well above 8 percent in Santa Fe and the part of Española that’s in Santa Fe County. The commission will make a decision at its June 27 meeting.
The County Commission requested the joint meeting in January, then deferred to a City Council request to delay its decision on raising the GRT rate until after the two sides met.
With three of the five commissioners new to the board, having taken office in January, there appears to be a renewed interest on both sides for the city and county to work collaboratively on matters of mutual concern.
The commission and council haven’t met jointly for two years, which officials on both sides said was too long. They informally agreed to meet more frequently, or set up a subcommittees to meet jointly on specific issues to keep lines of communication open.
While the agenda also included discussion of the annexation, growth management planning, the regional water authority and Regional Emergency Communications Center, much of the focus was on the GRT and the services it would fund.
The county is considering a one-eighth of 1 percent increase for which it has the authority, granted by the state in 2013, to make up for a phased-out loss of state subsidies. That tax is estimated to generate about $4.6 million per year to hire more than 30 public safety positions and fund behavior health services.
The Commission is also considering another increment of GRT — from one-sixteenth to one-twelfth of 1 percent — that would fund additional positions, as well as behavioral health services.
The county’s existing budget, without tax increases, provides for about $2 million in new spending for pay raises and other expenses. But county officials say the fire department is already understaffed by 20 positions, and there’s also a need to hire more sheriff’s deputies, corrections officers and dispatchers. It also has plans to create and staff a behavioral health triage center it says would take pressure off the county jail.
Former County Commissioner Miguel Chavez, who led the effort to create such a facility, said during the public comment period of Thursday’s meeting that 67 percent of inmates at the county jail have been diagnosed with mental conditions, effectively making the jail a de facto behavioral health facility. He noted that 52 percent of voters supported an advisory question on last November’s ballot that asked if they would agree to a GRT increase to fund behavioral health services.
Commissioner Anna Hamilton said she felt local government had an “obligation” to fund such a serious need. “It would be irresponsible to walk away from it,” she said.
Some members of the governing bodies said the broader problem was tax policy at the federal and state level.
City Councilor Carmichael Dominguez said perhaps the city and county should be working corroboratively on tax reform at the state level. Councilors Ron Trujillo and Joseph Maestas agreed, Maestas saying that the current structure sometimes pits counties and cities against each other.
Hurting business?
He also said government officials need to be concerned about the danger of depressing business development by setting taxes too high.
Mayor Gonzales also emphasized economic development, saying success in that area would generate more GRT and eliminate the need to raise taxes. He also said the city and county should look at improving efficiency, and proposed that the city and county consider a “shared service model” where one entity would handle such things as human resources, accounts receivable and procurement for both city and county governments. If efficiencies could be improved by even 10 percent, he said, money would be found to fund new initiatives.
“I know we always have to look to the tax base to generate revenues to support programs, but I also feel it’s a worthy cause and effort to challenge ourselves to think smarter about how we’re delivering service where we have a duplication of effort taking place,” he said.
On the matter of shared services, Commissioner Robert Anaya said there was an opportunity for regional operation over a behavioral health facility, and that the city and county need to work together.
“We’re a team, and we have to be a team to serve the interests of the public,” he said.