Mayor Keller says Albuquerque facing $40 million deficit
Crime, health care, reduced state funding, DOJ settlement cited
Flat gross receipts tax revenue, the state’s phasing out of “hold harmless” payments, rising insurance costs and complying with a settlement with the Department of Justice have resulted in a $40 million deficit in the City of Albuquerque, Mayor Tim Keller said Friday.
“Between rising crime, increasing health care costs, and the drying up of tens of millions in state funding, the chickens are coming home to roost.” Keller said in a news release. “It has become clear we are faced with a choice: own up to the financial reality at City Hall, or continue to muddle along and risk years of uncertainty about the resources that are required to bring real help for public safety and to protect our kids.”
The findings were those of a group made up of members of the mayor’s executive team, the Department of Finance and Administrative Services and representatives of other city departments tasked with analyzing options for closing the deficit.
Albuquerque is “one of the few cities left in the state that has not compensated with its own GRT increase despite years of repeated warnings from the legislature,” the news release states.
City Council President Ken Sanchez and Councilor Trudy Jones recently introduced legislation that would do just that.
Albuquerque is losing $300 million over 15 years as a result of the state phasing out its “hold harmless” payments that were made to make up for doing away with taxes on food and medicine, the release said. Meanwhile, city gross receipts taxes have been cut twice in the past 10 years.
Also cited was a “double digit” rise in medical benefit costs for its employees and the $4 million a year needed to cover the costs of compliance in a settlement with the Department of Justice.
“The administration is evaluating all of the options on the table to meaningfully fund public safety, including cost-cutting, the gas tax, the county shouldering more of the burden for behavioral health, and increasing fees,” spokeswoman Alicia Manzano said in an email.