Published: 11:20 am, Tue. Sep. 15th, 2015
Following five months of contentious debate, the Eddy County Commission voted 3-2 Tuesday morning in Carlsbad against the proposed two-eighths of 1 percent Gross Receipts Tax (GRT) increase.
An intense public hearing – which included comment from State Rep. Jim Townsend, Artesia Mayor Pro-Tem Terry Hill, former county commissioners Guy Lutman and Tony Hernandez, and others – culminated in a motion to approve the ordinance by Commissioner Stella Davis with Chairwoman Susan Crockett seconding.
When the roll was called, Commissioners James Walterscheid, Glenn Collier and Royce Pearson voted against the increase, with Davis and Crockett voting in favor.
The ordinance before the commission Tuesday was a revision of the original, which had called for a full three-eighths of 1 percent increase. The commission voted in June to enact a one-eighth increase to benefit the General Fund, with the remaining two-eighths designated for repair and reconstruction of county roads.
Passage of the two-eighths increase would have pushed the GRT rate in Artesia over 8 percent and above 7.6 percent in Carlsbad, a fact that has been a cause of concern for officials in both communities over the past several months.
Both the Artesia and Carlsbad city councils passed resolutions formally opposing the ordinance, pointing not only to the hardship the increased tax would place upon residents but the potentially unfriendly business climate the high GRT rates would create. The mayors of both cities have been vocal in their criticisms of the ordinance, citing the fact the total increase – including the one-eighth passed in June – would generate $300 million over the 20 years stipulated in the sunset clause to offset a $300,000 annual loss – $6 million over 20 years – in Hold Harmless GRT to the State of New Mexico.
Area legislators, including Reps. Townsend, Gay Kernan and Cathrynn Brown and Senators Cliff Pirtle, Carroll Leavell and Ron Griggs, also expressed objection to the increase, pointing out the state has committed to reducing the revenue lost to counties and municipalities over a 17-year period in one-seventeenth increments.
Walterscheid opened the public hearing Tuesday by stating he had asked the Loving Village Council to support the commission’s Hold Harmless initiative, and that the council had made a motion to do so, which passed 3-1.
County officials including Fire Service Coordinator Robert Brader and Public Works Director Ray Romero spoke in favor of the ordinance, with Brader stating road conditions have “already affected on more than one occasion our ability to timely respond and reach emergency scenes.” Brader also stated emergency equipment has sustained damage as a result of poor road conditions.
Vicky Conley, a southern Eddy County resident, also spoke in favor.
“Our roads have been dysfunctional, impassible, for over a year now, and they’ve continually gotten worse,” Conley said. “There is no way out of Loving or Malaga that you’re not endangering your family, endangering the schoolchildren that go to Loving, on the roads that we have now.
“I realize more people live in Carlsbad, I realize more people live in Artesia. I drive in Artesia, I drive around Carlsbad – you’re not subject to the dangers that we are, and we need immediate solutions.”
The prevailing theme amongst those speaking against the ordinance, however, was that although county roads are undoubtedly in need of attention, other methods exist to generate funds and the matter should ultimately be put to a vote.
“We’re not opposing fixing the roads,” said Townsend. “I know roads need to be fixed, and I have offered my help in putting a program together to get those fixed and to get the people involved, but the people have spoken. They want to be involved in the process.”
Townsend breached again the subject of the discrepancies between what the county stood to take in with the two-eighths increase versus what it is losing.
“Remember, the state said that they would back off of that Hold Harmless payment, so the first year, the amount of deduction to the Hold Harmless payment is about $20,000,” Townsend said. “To date, you have passed one-eighth of 1 percent, which is estimated to collect $5 million worth of revenue. So you’re going to get $5 million or revenue to cover a $20,000 expenditure. That’s a lot, and it’s more than the people can afford today.
“Having taxation without representation in this country has been a problem for a long, long time. It brings out the very worst in people sometimes, because (citizens) believe they elected you and I to represent them, not to edict what they should have to do. That’s not our job. Our job is to listen to the people and do what they say, not to do what we think is best.”
Townsend also stated that the state legislature is very aware of the road problem in Eddy County.
“For the first time in the history of the state, the legislature collectively, 70 members of the legislature, took money from Albuquerque, Santa Fe and every other district and gave it to roads in Southeast New Mexico. And I think that was about $45 to $50 million.
“We are keenly aware of how much Southeast New Mexico is important to this state. The oil and gas industry brings down about 35, 36 percent of total state revenue. It’s extremely important. But today, that industry is on its ears. Oil’s gone from $100 to about $40 (per barrel). You cannot tax your way to prosperity. It’s impossible.”
Artesia commissioners Collier and Pearson have expressed opposition to the ordinance throughout the process on the grounds that the matter should be sent out for referendum, and the two re-expressed that belief Tuesday.
“It is an honor and a privilege to be elected as a county commissioner,” said Collier. “Our duties are vast, but most of them have a relationship totally to the needs, desires, family values, and economics or our families and all of our citizens in 4,300 square miles. At one time, we did survive $7-a-barrel crude oil, and we landed on our feet.
“I want you to know that I will not be a party to ignoring you, kicking you to the curb, and not allowing, in the true tradition of Eddy County, a right to vote.”
“The safety of our folks who live and work on these county roads and drive these roads every day, along with emergency response, is very important to consider, but also, we need to consider the downturn in our economy in Eddy County,” said Pearson. “I understand that for a referendum, it’s going to cost anywhere from $50 to $60,000 for voters to go vote concerning the issue. I get that, but yet we’ll spend money for architects and engineers for projects that by far exceeds that amount of money.
“I support letting the people decide this issue in referendum. I always have. I’ve talked to merchants in North Eddy County and Artesia specifically that tell me their business is down 50 percent. This will push our GRT to just over 8 percent, which is a concern that I have, so I can’t support it without a vote of the people.”
Davis and Crockett have been in favor of the ordinance throughout and maintained their belief that the increase is necessary in order to improve roads and that no other avenue is as viable or capable of being implemented in a timely fashion.
“It’s been a difficult decision,” said Davis. “I’ve lost a lot of sleep over it. It’s been said that there’s other alternatives. Secretary Tom Church (cabinet secretary of the Department of Transportation) was here last summer, and he gave us all these promises that we were going to get money for the roads. How much have we got today? Very little. Legislators only can do so much, but how many people have to die on our roads?
“I’m going to liken this to a mom that’s giving her child medicine. The child pushes back, screaming and kicking, doesn’t want that medicine, but mom knows that in the long run, it’s going to get better, that child will get better, and this is the same with this tax. We have to do something immediately.”
Davis also stated that while opposition to the ordinance was substantial, there was an equal amount of support from people unwilling to express it.
“I’ve heard from a lot of people who don’t want the tax, but in the same token, I’ve heard a lot from the people that support it,” Davis said. “They don’t want to come here. A lot of them are businesspeople, and I’ve personally heard them tell me, ‘I don’t want to come here because I’m afraid if I support this tax, it’ll hurt my business because I could get boycotted.’ That was from two businesses here in town, and I heard one from Artesia.
“It’s damned if we do and damned if we don’t. … Under normal circumstances, a referendum would be the way to go, but this is not under normal circumstances.”
Crockett took exception not only to the opposition of the ordinance by the councils of Artesia and Carlsbad but by state legislators, as well.
“Those are great resolutions, I’m glad they did them, but let me mention one thing for the public to know: Myself, as this commissioner, has not heard from one Artesia city councilman and I have not heard from one Carlsbad city councilman regarding their feelings. None of them took the time to pick up the phone to call me, come by my office, send me an email, nothing, but they took the time to write a resolution? Well, I’m sorry, I’m an elected official, and if I’m going to do a resolution against something, I’m going to pick up the phone and call the city council, the mayor, I will call them and tell them why I’m doing this resolution.
“I want to say thank you to the Carlsbad Chamber of Commerce and Carlsbad Department of Development for not supporting these resolutions. They decided that their goal was economic development, not to get in an arguing match between the cities of Artesia, Carlsbad and the county, so thank you to them.”
Crockett stated the county commissions of Otero, Chaves and Dona Ana, which also fall under the representation of legislators who opposed the Eddy County increase, have passed increases of two-eighths (Otero) and three-eighths (Chaves and Dona Ana) without opposition.
“All of those state representatives and state senators who have opposed Eddy County’s GRT were not there to oppose the Hold Harmless GRT for the other counties,” said Crockett. “Rep. Townsend, who’s been the most outspoken, did not send letters to the editor, speak to any city groups, senior citizens’ groups, or for that matter attend any of the county commission meetings in Chaves or Otero County opposing their approval of the Hold Harmless GRT.
“So why are you using the bullying tactics in Eddy County when you didn’t use them in the other counties?
“I know that all of you in this room know that I support the tax. I made that decision on my own. I did not make it with anyone’s help. I made that decision on my very own. I was born and raised in Malaga, I go down there, I visit, I own land down there, I know what it’s like. I’ve been in Artesia, I know what those roads are like. I never wanted to enact a tax, but when I was elected commissioner, we had a flood nine months after I was elected. A year later, we had another flood. Did I think an act of God was going to happen twice? No, but it did, and now I’m faced with how are we going to do this, how are we going to fix our roads.”
Walterscheid’s closing comments centered around his disappointment with the wording of the Hold Harmless GRT and concern over the rising cost of road repair, which he stated has increased from $1 million per mile to $1.4 million.
“I think the legislature set this up wrong,” Walterscheid said. “There’s no referendum (allowed). If the county passes it, it’s county-wide, and the cities are helpless, if you will, against whatever the county commission decides. They have no recourse.
“It pits the counties and the cities against each other by the way they put this thing together.”
Ultimately, the commissioner sided with the faction supporting a referendum. It was, as of press time, unknown whether the county plans to reintroduce the GRT increase as a capital outlay tax that would require a public vote.