Creation of West Side tax district questioned

Economists say state taxes would be eroded

SANTA FE — Economists for two state agencies on Tuesday questioned the idea of creating a new tax district on Albuquerque’s West Side, arguing that it could erode state tax revenue.

Supporters of the tax district, in turn, described much of the analysis as prejudiced and incomplete.

The debate surfaced before the state Board of Finance — where board members spent nearly five hours going over an application to establish a tax increment development district in Albuquerque. The district would allow a share of future tax revenue generated there to be diverted to reimburse the developer for building streets and other public infrastructure.

The board held off on making a final decision.

But in reports to the board, economists working separately for the Department of Finance and Administration and the Legislative Finance Committee said the applicant, Western Albuquerque Land Holdings LLC, hadn’t proved to their satisfaction that approval of the district would be in the state’s best interest.

Creation of the district, they said, would divert some tax revenue for use within the district — rather than making it available for basic government services in general — and it might not bring new jobs to New Mexico from outside the state.

But supporters of the proposal assailed the economic analysis — the

one conducted by DFA, in particular — as biased and one-sided. The report by legislative analysts wasn’t discussed at the meeting.

At stake, supporters said, is a push to lay the groundwork for a major medical center and other job opportunities where they’re desperately needed — west of the Rio Grande in Albuquerque.

Board member Robert Aragon intensely questioned Clinton Turner, chief economist for the Department of Finance and Administration, about his agency’s evaluation of the proposal.

“I think the analysis is skewed by bias,” Aragon said.

He said the proposed development is likely to create jobs and bring needed services to the West Side.

Aragon, an Albuquerque lawyer, also disputed some of the legal analysis offered by the board’s own attorney, Sally Malave, an assistant attorney general.

As for the economic analysis, staffers for the Department of Finance and Administration — part of Gov. Susana Martinez’s administration — and the Legislative Finance Committee, which analyzes policy proposals for the Legislature, offered similar conclusions.

The DFA analysis said the requested tax district wasn’t “clearly justified.” In other words, Turner said, it wasn’t clear the project would create jobs that wouldn’t be created otherwise.

In a separate letter, two economists for the LFC said the requested district “is not in the best interest of the state.”

Pat Rogers, an attorney representing Western Albuquerque Land Holdings, said the company had revised its applications to address the concerns raised by the economists.