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 Democratic gubernatorial ticket but Garcia Richard and governor nominee Deb Haaland will now be the first all-female ticket. (African-American Ant Thornton was the GOP nominee for Lt. Governor in 2022.

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

Sen. Pope

The race for lieutenant governor is revealing a much more aggressive left wing in the state Democratic party with important implications for economic policy should Deb Haaland become the next governor. 

The race for the number two spot features two leading hopefuls--term-limited State Land Commissioner Stephanie Garcia Richard and ABQ state Senator Harold Pope. 

Their below-the-radar contest is to fill the vacancy created when Secretary of State Maggie Toulouse Oliver won the primary nomination over Pope but withdrew for health reasons. The race will be decided by about 500 members of the party's State Central Committee in a four-day electronic vote July 25-29. 

The party's more pronounced left wing was in evidence at the June primary election when moderate Democrats failed to muster respectable percentages in even conservative counties such as Eddy, Chaves and Lea, revealing that middle of the road politics is practically extinct among the party's nominating wing.

Now the Pope-Garcia Richard battle unveils party progressives even going after Haaland who is being labeled a "corporate Democrat" by some supporters of Pope. That is quite the turn of events given that Haaland was elected to the ABQ congressional seat and in 2018 immediately caucused with the progressive "Squad." 

It is not social issues such as abortion or trans rights that are now in dispute; it is critical economic matters and comes as Democratic socialists make major strides in New York City and elsewhere. In New Mexico that dynamic is being manifested in several key proposals where the newly energized left parts ways with Haaland who is urging committee members to name Garcia Richard as her running mate rather than the more progressive Pope.

--Private Equity Takeovers of PNM and the New Mexico Gas Company.

Garcia Richard

Pope opposes Blackstone's proposed $11.5 billion acquisition of TXNM Energy, PNM’s parent company. There is a similar private equity bid of $1.250 billion from Bernhard Capital Partners for the New Mexico Gas Company. Both takeovers await decisions from the Public Regulation Commission (PRC). 

Pope argues an unbridled thirst for profit by the bidders would ultimately "screw" ratepayers. He has joined protests outside PNM headquarters to condemn the deals. Rather than just regulating the private equity firms, Pope introduced Senate Memorial 9 urging the PRC to pause the acquisitions. 

He also proposed a socialist alternative: having the state use its permanent funds to buy a majority stake in PNM and possibly a nonmajority stake in Gas Company. He argues this would keep utility profits in New Mexico and diversify state revenue away from volatile oil and gas royalties. 

Haaland has focused her platform on lower utility costs and holding public utilities accountable, rather than pushing for an outright state takeover of the energy grid. While enviros have pressured the PRC to reject the Blackstone and BCP bids, Haaland’s approach leans on enforcement of the state's Energy Transition Act to ensure utility profits don’t come at the expense of regular families, but she has stopped short of endorsing Pope's state-ownership plan. 

Says Dem Central Committee member Mitchell Freedman of Rio Rancho:

I continue to say this is an important political moment to show Deb Haaland she and her consultants can't run the state like she ran the Democratic Party (as chairwoman) in 2016. The push for Pope is part of the Dem base revolt against corporate Dem leadership and the consultants who simultaneously fund and advise them.

JUPITER 

On the massive Project Jupiter data center being built in Santa Teresa, Pope, 52, wants the project halted, citing concerns about the strain hyperscale data centers place on water resources and the local energy grid. 

Jupiter will not tap into the local grid but instead use natural gas fuel cells for power. But enviros assert the center could still produce carbon emissions equivalent to a coal-fired power plant. Pope is pushing for regulatory interventions, including a statewide data center moratorium as was recently done in New York state.

In contrast Haaland supports a temporary pause on new data centers--but not Jupiter--while the state drafts rules regarding water usage and grid demand. She says: "New Mexico is not a piggy bank and I support our state putting guardrails in place that data centers must follow...Large corporations must do their part. . .As governor, I’d rather fix the guardrails than shut the door on an entire industry."

Garcia Richard, 52, is actually more aligned with Pope than Haaland on Jupiter.. The Land Commissioner made recent headlines by halting a proposed natural gas line to Jupiter that would run across state land--a direct blow to the project and more stern than Haaland's position. 

The bottom line on the divisions now on display in the Democratic party is whether the more insistent leftist positions on economic matters become more relevant in Santa Fe. Will there be state takeovers of gas and electric utilities previously thought inconceivable? A forever ban on data centers? A universal basic income for all residents which Pope has warmed to?

Garcia Richard, with Haaland's blessing, has the edge over the more progressive Pope but no matter who wins the campaign has been revealing. The strain of socialist thinking we've seen in the nation in response to rampant income inequality and the increased cost of living is now a tangible, mainstream ideology in New Mexico. That's a first. How it plays out promises to be more suspenseful than the upcoming election. 

TRAIL DUST

Former Las Cruces Mayor Ken Miyagishima has dropped his independent candidacy for governor after failing to collect 14,574 petition signatures needed to qualify for the November ballot, and he has thrown his support to Republican Gregg Hull. 

Miyagishima, a conservative Dem turned independent, toyed with filing a lawsuit to dispute the high number of signatures required of an independent candidate but decided not to. Still, that threshold, upheld in a long ago court ruling, could use anther going over in an era when registered independent voters now rival the number of registered Republicans. . .

But hold on. There may be a court review yet. A federal lawsuit has been filed challenging the petition requirement that kept Bob Perls from running for the US Senate seat held by Sen. Ben Ray Lujan. Perls, chairman of the newly formed New Mexico Forward Party, filed suit over the requirement that he needed those 14,000 plus signatures to qualify for the ballot. He argues once the Forward Party submitted enough signatures to qualify as a minor party, they should have been allowed to place candidates on the ballot without a further petition requirement. The lawsuit and other info is here.

Former ABQ city clerk and Dem state Sen. Katy Duhigg has a rebuttal: 

The statewide signature requirement for independents and minor parties is much higher than those for major party candidates because those independent and minor party candidates get to skip running in a primary. It’s not a plot, and it’s not unfair. It is the trade off for only having to run in one election (the general election), instead of two (primary and general). . . 

Dem US Rep. Gabe Vasquez holds a significant money lead over Republican Greg Cunningham in the race for the southern congressional seat. In the latest federal campaign reports Vasquez reports raising $569,000 and having nearly $2.4 million in cash on hand. Cunningham raised $382,000 and reported $768,000 in cash. The Cook Political report ranks the Second Congressional District lean Democrat. Polymarket bettors have Vasquez with an 85 percent chance of victory.

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Labels: Ben Ray Lujan, Deb Haaland, Gregg Hull, Harold Pope, Sen. Katy Duhigg, Stephanie Garcia Richard