UPDATE: The ABQ City Council Monday evening said the panel has "dismissed" the proposed increase in the gross receipts tax. 

Affordability is the buzzword for the '26 campaign but that falls on deaf ears among some members of the ABQ City Council. Two councilors in particular, Council President Klarissa Peña, a Democrat, and Republican Brook Bassan have launched a last-minute push to raise taxes on city residents.

The two councilors have given up getting a majority of the nine member council to approve an increase in  the Gross Receipts Tax--the council defeated two attempts this year on 5 to 4 votes--but now they're pushing the council to place the hike on the November ballot and asking voters to tax themselves. And there's a rush to do it. The deadline for submitting the resolution is August 25.  

The tax hike would mean the GRT would go up by .04875 percent and take the overall rate in the city to 8.113 percent or $8.11 on a $100 purchase. 

That high rate is viewed as especially onerous for low and middle income residents who spend nearly all their income on living expenses. Higher income households spend a smaller proportion on everyday services with a significant portion of their income going toward savings and investments that escape the tax.

On the same day the councilors released their new plan for increasing taxes Mayor Keller came with a release reminding residents that the city's minimum wage will increase from $12 an hour to $13 on January 1. He said ABQ is "living through a historic cost of living crisis." 

If this was meant to soften the blow of raising taxes on low-income workers, it fell flat. If there is an affordability crisis why consider taking money out of their pockets with a tax hike?

The increase is opposed by small businesses that have long cited the GRT as an inhibitor to economic development. In fact, MLG and the legislature in recent years have passed two small cuts in the state's portion of the GRT which is now 4.875 percent, but municipalities like ABQ still have room to raise their rate.

THE REASONING 

Councilor Peña

Bassan and Peña insist that while the city has an annual budget of over $1.5 billion including federal funds, the city can't finance higher pay for city employees and that it is becoming difficult to find new hires. If it gets on the ballot and is approved by voters, the tax could bring in $113 million a year. From the councilors release: 

If approved by voters, 53 percent of the revenue would be dedicated to municipal operations and maintenance, including employee wages. These funds will help address compensation gaps, strengthen recruitment and retention efforts. . .The remaining 47 percent. . .would be dedicated to community enhancement projects, including parks, trails, transportation infrastructure, public safety facilities, cultural and recreational facilities, and other capital improvements This portion of the funding is dedicated for 21 years, ensuring focused investment in long-term community priorities 

The city has some 6,000 employees who hold some of the best paying and most stable jobs in the state, replete with medical insurance, guaranteed vacations, paid overtime, predictable cost of living raises and generous pensions that make the ones in the private sector look third-rate.

Even as ABQ's population has actually declined in the last decade from 559,000 in 2016 to 555,000 today and the information age has brought vast efficiency improvements, the number of city employees has not declined. That needs explaining before voters are asked to administer the self-punishment of a tax increase.

(We didn't mention the skyrocketing overtime pay at APD, a systemic issue the city's political class has failed to address for years.)

A POOL AND A TAX 

Councilor Bassan

There could be another sore spot with voters. Councilor Bassan has stated that she wants to utilize the tax to finish building the North Domingo Baca Aquatic Center in her NE Heights district. The original cost estimate was $32 million but has since soared to $75 million, calling into question the need for such a facility. 

It's estimated that over $35 million is still needed to finish construction which includes a competitive 50 meter lap pool. So voters might ask, "why should we increase the price on everyday needs for a giant swimming pool?"

Mayor Keller and the Council have done little to realize cost savings that could be implemented to avoid the tax increase even as the city projects lower revenue in the years ahead. The city government has been unable to cope with a long-term stagnant economy that is at the root of its financial difficulty and have no comprehensive restructuring plan that would make delivery of city services more efficient and less costly. Instead they are opting for tax increases that could discourage growth and compound the problem.

Bernalillo county government also has their heads in the sand. Thanks to various tax increases, they now have a bloated budget of $1.09 billion. 

The city's population is 560,000. Only 107,000 residents live in the county for a total BernCo population of 667,000. Many of the services provided by these two separate governments could be consolidated, resulting in significant cost savings. Consolidation would require approval from both city and county voters. It has been over two decades since voters last rejected that proposal.  

Restructuring, consolidation, efficiency. Those should be the buzzwords for Councilors Peña and Bassan before they plead with voters to bail them out of the financial inertia they preside over at Government Center. 

Correction: In a first draft we reported that ABQ Councilor Telles voted for a GRT increase. She did not.   

THE POPE SCARE

It took a final-hours scramble by the state's Democratic party establishment last week to thwart the political ambitions of ABQ state Sen. Harold Pope, Jr. He was defeated in his bid to become the party's lieutenant governor nominee by Stephanie Garcia Richard in a close vote that saw her win 255 votes from the party's State Central Committee to Pope's 218. Two other hopefuls received four votes. 

The committee battle was joined when Maggie Toulouse Oliver, who had won the lieutenant governor nomination at the June primary, withdrew for health reasons. She had defeated Pope in that primary 80-20 percent.

Pope would have been the first African-American on a gubernatorial ticket but Garcia Richard and governor nominee Deb Haaland will now be the first all-female ticket. 

Pope put on an impressive campaign, full of unapologetic progressivism backed by a career in the Air Force and his Roundhouse experience.

Garcia Richard brought two terms of experience as the Commissioner of Public Lands, a statewide office that is only second in power to that of the governor.

Haaland openly backed Garcia Richard and took a hit over the close vote. Critics argued Garcia Richard should have easily walked away with the win and when she didn't it exposed Haaland's less than firm grip on the party apparatus. 

Gov. Lujan Grisham and Rep. Leger Fernandez were among the Dem heavies coming with last minute endorsements of Garcia Richard. That helped put her over the top and avoid an outright embarrassment  for Haaland. 

Sen. Pope

While Pope may be going away, his candidacy sparked a vigorous debate in the party. His support of universal basic income for lower income households and his backing of the state buying PNM, the state's largest electric utility, won him raves from the progressives, some who now identify as democratic socialists. 

As a governor Haaland could have her hands full negotiating between the two wings of her party. Pope could be an ally at the Roundhouse and is expressing willingness to work with her. He certainly has her attention. 

If Garcia ultimately becomes lieutenant governor--and the odds heavily favor that outcome--the prize will come with a harsh penalty. Unless she can break the mold, like all previous lieutenant governors she will be relegated to the political shadows. But it is comfortable there with a full-time salary and staff and plenty of funerals and graduations to attend.

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Labels: ABQ Gross Receipts Tax, Councilor Bassan, Councilor Peña, Harold Pope Jr., Stephanie Garcia Richard