City Council to consider tax increase ballot question

Las Cruces City Council could approve a resolution on Monday that would ask voters to consider a ballot question that, if passed in the November election, would raise gross receipt tax rates to generate $11 million of revenue per year.

The prospect of a tax increase was first mentioned during a budget work session in April, where deputy economic development director Chris Faivre presented several options for the city to generate revenue in order to fund public safety, street improvement, park improvement and public facility projects.

Faivre said the city could generate $11 million per year through the referendum by raising the tax by 0.3250% and about $9 million per year through an ordinance that would raise the tax by 0.2375%.

If the council adopts both recommendations, it would equate to an increase of about 56 cents per $100 spent on goods and services.

The city's current GRT rate is 8.0625%. It sits behind municipalities such as Taos (9%), Santa Fe, Ruidoso and Farmington (8.1875%), Sunland Park (8.175%) and Anthony (8.1250%). Albuquerque's rate is lower - 7.6215%.

The last time the city raised its GRT rate was in 2015 when it increased from 7.9375% to 8.3125%, although it has since been lowered to the current rate.

But during another work session May, Council determined that a potential tax increase should be determined by voters first. If passed, it's likely an ordinance could be passed by council following the election.

"If it's not voted on by the voters, then we could go to an ordinance, but I think that people will want to vote on that and not leave it entirely to City Council," said Councilor Yvonne Flores during the May work session.

Additionally, Faivre presented results of a community opinion poll on a potential increase to the city's gross receipt tax rate. According to Faivre, those surveyed supported an increase to fund capital improvements and maintenance of public safety initiatives, housing, roads and traffic and park and public facility improvements.

Faivre said 88% of voters surveyed saw public safety as a priority and the reason they were most willing to support an increase.

There are two items on Monday's agenda related to the proposed gross receipts tax increase. Council would need to approve a resolution that would approve the language of the ballot question and allow the city to file the resolution with the Doña Ana County Clerk's office in time to be placed on the ballot.

The county's deadline is Aug. 27, but Faivre said the city wants to submit the question to the county by Aug. 5.

The proposed language of the ballot question reads, "Shall the City of Las Cruces impose a municipal gross receipts tax in the amount of three hundred twenty-five thousands of one percent (0.3250%) the revenues of which shall be used for funding capital improvements and maintenance for public safety, streets, parks, and other public facilities and critical infrastructure?"

Council will also vote on an ordinance that adopts a municipal GRT to ensure compliance with the New Mexico Taxation and Revenue Department. If voters approve the increase in November the ordinance serves as the mechanism that the state uses to implement the increase.

If approved by voters, the tax increase would take effect on July 1, 2025.

Jason Groves can be reached at 575-541-5459 or jgroves@lcsun-news.com. Follow him on X @jpgroves.