I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Part of the state budget package sent by the legislature to the governor this week includes a food tax provision that will exacerbate an already tough budget situation for New Mexico’s largest city.
Like the state, the city has its own sizable deficit this year and has to figure out how to put together a budget for next year in light of a significant gap between projected expenses and revenues.
Albuquerque will come in under its $475 million budget this year— by about $10-$12 million—although officials have tightened the city’s belt to prepare for a $19 million shortfall, just in case. But for the budget year that begins in July, the city has identified $54 million more in expenses than revenue projections support.
According to city officials, the majority of those expenses are for new projects or agreements that obligate the city financially. New facilities like the Domingo Baca community center are in the works. The costs of contracts and licenses are going up, and ongoing maintenance of equipment and vehicles that keep the city running can be trimmed but are still unavoidable. Pay raises for fire and police workers were also agreed to in 2009.
Then, according to the city’s Web site, about $8.8 million represents a decline in revenues over 2010. It’s that line that increases by $1.6 million due to the food tax provision of the state budget package. And that figure will grow to $3.2 million in the next year, 2012.
Here’s why. The state eliminated the food deduction it created in 2005, but gave a food credit for state gross receipts tax. This means only local gross receipts taxes will apply to food, which average 2 percent across the state. The legislature did this so that the local governments would have revenue to replace the funds the state has been paying out to them since 2005 to make up for losing the tax on food. Most of that compensating revenue is being clawed back to help balance the state budget, and will decrease even further in 2012.
Some cities and counties won’t see a big impact, because the renewed local collection of food tax will make up for the loss of compensating revenue. But Albuquerque’s gross receipts tax rate has gone down, leading to the projected deficit between the food tax it brings in and compensating revenue it is losing.
In a statement emailed to The Independent, Albuquerque Mayor Richard Berry seemed to take the news in stride, saying Albuquerque has to deal with the impacts of state legislation like all other municipalities.
“I’m working with my team and I’m confident we will balance the budget as required by law and we will continue to provide a good value to the taxpayer,” Berry said.
We did not receive a reply to an e-mail asking Berry if he agreed with taxing food.
