At its regular meeting Tuesday afternoon (March 14), the Town of Taos Council considered a proposed ordinance that would represent the first gross receipts tax increase imposed by the town since 1994.
"We just recently, not recently, but a few months ago, retained a financial advisor who did a pretty comprehensive analysis of the town's finances; the position that we're in financially — which, we're proud to report, we're very healthy at this current time," Town Manager Andrew Gonzales told councilors. "It was brought up at those discussions that the town at this time still has a capacity within its [town council] to increase its GRT."
The 0.4875-percent hike would translate to new revenues amounting to nearly $2 million per year, Gonzales said, noting that he had already asked Town Clerk Francella Garcia to advertise the proposed ordinance in the Taos News ASAP in order to instate the new GRT rate by July 1, should the council choose to adopt it.
The funds would help pay for wage increases for town employees, among other items, according to Gonzales, who noted that, because a separate 0.5 GRT increment expired in December, the 0.4875 increase would effectively still result in a lower rate compared to the past several years. As it stands, the town's total GRT is 8.0625 percent; if the town does nothing, that rate will sink to 7.5625 percent on July 1.
The tax increase would also bolster Taos' General Fund in order to ensure that, if the town is able to attract the workers it needs — the town has a 28 percent vacancy rate at the moment, amounting to about $1.3 million in unpaid budgeted positions — it will be able to pay well and retain them. It would also offset the hit to the town's tax base that New Mexico House Bill 367, which seeks to lower the state-imposed GRT rate and eliminate business-to-business taxes on some services, would effect. But after facing serious pushback from local governments, HB 367 is stuck in a legislative committee and appears unlikely to move before the end of the 60-day session on Saturday (March 18).
The 0.5 increment Gonzales referred to, which had directed revenue toward Taos County school districts for the past 20 years — until a change in state law forbade it — could come back, however, as it is the subject of a bill that's currently making its way through the New Mexico House.
Sponsored by District 6 N.M. Sen. Bobby Gonzales and District 42 state Rep. Kristina Ortez, Senate Bill 205 seeks to renew the 0.5 increment and direct the majority of it toward capital improvements at Holy Cross Medical Center, with 0.25 percent of the increment going to the UNM–Taos Nursing Program. Before it went to school districts, the tax increment originally went to Holy Cross.
The bill passed the Senate last Friday (March 10) and was set to be heard by the House Taxation and Revenue Committee on Wednesday (March 15). If it passes the House and is signed into law, county voters will have to approve the renewed tax.
Councilor Marietta Fambro also noted that Taos County voters approved a 0.25 GRT increase in November to fund fire and EMS services across the county, including the Taos Volunteer Fire Department. She asked why the emergency services tax increment hadn't been included in the town's new tax tables.
Finance Director Lupe Martinez said the rates the state sent the town would take effect July 1.
"The rate for the county remained the same," she said. "So I'm not sure if that was a county-area tax or a countywide tax."
District 4 Commissioner AnJanette Brush, who chairs the Taos County Commission, told the Taos News "there was an error on the state's part," which County Manager Brent Jaramillo is working to address.
In other news, the council awarded a $163,821 contract to the Center for Responsible Travel, which is tasked with developing a "destination stewardship plan" for the town, a popular tourist destination.
"The Town of Taos and surrounding areas have experienced an increase in visitor volume during the pandemic, similar to other mountain resort towns around the United States," the company said in its proposal. "Statewide, New Mexico saw a visitor spending increase in 2021 that surpassed 2019 levels for the first time. This increased visitor volume combined with the inflow of remote workers, second homeowners, and the increase of short-term rental units, has created a situation that requires a delicate balance to be struck to support the unique challenges the town now faces.
"Tourism, as the primary driver of Taos’ economy, must be supported and managed, while promoting long-term tourism sustainability to preserve its tourism assets," the company added. "Due to the current new-resident growth rates, these goals must be accomplished while simultaneously ensuring socio-economic balance in the community and focusing on the quality of life for all residents, including its Indigenous community and guests as well."
Karina Armijo, director of tourism and marketing for the town, said, "Basically, what we found through the years is that tourism, if not reassessed, you have problems with over-tourism or not really listening to the community. This is a way of kind of a shifting the mindset to really understand what the community wants, and addressing those issues in a long-term plan.
"When we read the future of tourism together with our community, while taking into consideration the needs of the residents, the visitors and the natural environment, [it takes] all the input from the community to understand how we move forward," Armijo said.
Councilors approved the contract, but not before Fambro took Mayor Pascual Maestas to task for sitting in on the committee meetings where eight proposals were vetted and the Center for Responsible Travel was ultimately recommended for the contract.
"I was looking at the procurement memorandum and I saw that yourself [and] the manager also sat in on the [evaluation committee]," Fambro said. "And in my experience as an employee and being through all these processes, it's not recommended that any of us as a council member or mayor sit in on an RFP that we are going to be awarding.
"It can be a two-two tie, and you might have to break the tie; and that limits you from actually voting on it," Fambro added, noting that the presence of a council member or the mayor could be perceived as intimidating. "I just want to point that out for all of us that sit up here."
Fambro emphasized that she doesn't believe Maestas had any ill motivation sitting in on the committee meetings, but suggested he not do it again.
"Councilor, this was a very important process that I think is going to set the direction for Taos and tourism for many years to come," Maestas responded. "And while I didn't participate in any of the process, ask any questions, this was something I was interested in and I understood the risk that if it came down to a vote I would have to recuse myself — but that's the risk that I was willing to take."
"Basically, what we found through the years is that tourism, if not reassessed, you have problems with over-tourism or not really listening to the community. This is a way of kind of a shifting the mindset to really understand what the community wants, and addressing those issues in a long-term plan." This quote from the above article sums it up. Taos is growing and it's gotta find the balance.
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