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Recently, a lot has been said about the need for and the Legislature’s intent with respect to the 3/8’s Gross Receipts Tax (GRT).

As your elected representatives, we felt obligated to make sure the facts were presented.

First, it is true that in 2012 the New Mexico Legislature created a “Hold Harmless” taxing ability for counties and municipalities to compensate themselves for the loss of tax revenue from the State of New Mexico. No one disputes this fact.

But what is not being disseminated to voters clearly is that the State will be removing this income over a 17-year period. Each year the State will reduce the Hold Harmless amount by 1/17, so the first year Eddy County will be losing 1/17 of the approximate $300,000, or about $20,000 — that’s all. So it won’t be a total loss all at once, but a slow, measured removal over a 17-year period.

The State Legislature never intended the taxing to be punitive and certainly not cumulative. The new approach allows local governments, city and county, to make up the tax revenue that is being lost. The Legislature did not intend to circumvent the right of the voters to decide on new taxes.

The Eddy County Commission has already approved a $5,000,000 annual tax increase to offset the $20,000 annual loss.

The question the Commission will face in Artesia, when it meets there this week, is whether to tax another $10,000,000 annually to offset the $20,000 annual loss. That would be a total new annual tax of approximately $15,000,000 to compensate for losing $300,000.

If the new tax is approved by the Eddy County Commission, that would mean in the next 20 years residents would be deprived of nearly $300,000,000, and the burden of the tax would make Eddy County less friendly to businesses. But to make matters even worse, each city can impose the same GRT increase, meaning that people living in cities in Eddy County could be taxed once as a city resident and then again as a county resident, so the 3/8’s doubles to 3/4 of a percent of new tax.

One of the commissioners apparently is pushing for the county to immediately pass the additional tax increase, saying that the Legislature might close any loopholes next year. On issues as important to people’s financial health and livelihoods, elected officials would be wise to listen closely to what their Constituents are saying.

As your Legislators, we do not believe higher taxes are in our best interest.

Representative Jim Townsend
Senator Gay Kernan
Representative Cathrynn Brown
Senator Cliff Pirtle
Senator Carroll Leavell
Senator Ron Griggs