Tucumcari has a growing list of expenses and a shrinking list of revenue sources, Mayor Jim Witcher said Thursday.
About 50 residents showed up to the Tucumcari Convention Center Thursday night to hear what Witcher and city officials had to say about two proposed tax measures that Witcher and others hope will help offset the costs of upcoming city initiatives while helping to ease the burden of decreased federal and state funding.
Witcher began the town hall meeting with a PowerPoint presentation outlining upcoming city expenses, including demolishing the downtown Sands Dorsey building and 92 “dangerous properties” Witcher said needed to be taken down, refurbishing one of the city’s two water tanks, replacing the city’s water transmission line, rehabilitating city water wells, and purchasing new landfill equipment and garbage trucks.
Witcher’s proposal is to re-allocate the city’s existing Ute Lake water tax to repay a loan for the demolition and disposal of the hazardous Sands Dorsey building. He also wants to enact a quarter-of-one-percent gross receipts tax increase for the city. Witcher said the tax increase would cover non-food and non-medical items and would not significantly impact Tucumcari citizens.
“Anything like that, you spend $100 on it, it’s going to cost you a whole quarter. It’s not going to bust you, folks,” Witcher said. “I don’t know how much — I’m going to guess that probably from a third to half of that — is going to get paid by people passing through. They stop to get gas … if they buy a coke and a couple of candy bars, we get a penny or two. So a lot of that is going to be paid by somebody besides me and besides you.
“If we don’t do these things that we’re talking about, both the change to the Ute water tax and increase by a quarter of a percent (gross receipts tax), we’ve still got to have the things I’m talking about, plus other things that you haven’t even seen yet,” Witcher said.
Some residents expressed their opposition to raising taxes and government spending at the meeting.
“In the last election, the voters said ‘Smaller government, less spending,’” Jim Lafferty said.
Kelly McFarland, a Tucumcari-based public accountant, emphasized that gross receipts taxes come from business revenue, and that the taxes should not be confused with sales taxes.
“A gross receipts tax is a tax on businesses. This is not a tax on the buyer. That’s what makes it such an insidious tax,” McFarland said. “Tucumcari has no future without its businesses. I am one of the largest payers of the gross receipts tax. I employ 11 people, and a couple of people in other states. I could move my business 110 miles to the east and so could every other service provider in town, and still continue to provide our services at tremendous savings.”
“I was in business myself for a while, and when I had to pay for a bond or a tax or anything else, that cost went on to the consumer, whoever I was working for,” Witcher responded. “In a sense, yes, the businesses are paying, but also in a sense the people use it because they tack it on.”
Rose said city residents should make clear which programs and services they would be willing to do without, whether or not the proposed tax measures pass. She also warned that the city risks spreading its resources too thin between new initiatives and the $10 million in loans the city already owes to federal and state agencies for infrastructure projects, which Rose said is costing the city $694,000 yearly to pay back. If the city enacts the gross receipts tax increase, it cannot enact additional increases.
Rose presented a list of measures the city has taken to cut back its spending. Among those measures were merging the cemetery, recreation and parks departments, discontinuing credit card payments for city utility bills, charging residents $10 late fees for unpaid bills, auditing city accounts and contracts, cutting some full-time city positions to part-time positions and installing a more energy-efficient heating and cooling system at the city library.
“The only concern that I really have with passing the tax and using it to pay the loan is we’ve got these pieces of equipment and we’ve got other pieces of equipment that are going to go down before we get that loan paid off. That’s my main concern, that if we pledge out too far in advance we’re going to be paying the $694,000 per year and then have our last amount of gross receipts tax. I’d be real careful and cautious about taking a loan on that amount,” Rose said.
At a Nov. 11 city commission meeting, the commission approved the first reading of an ordinance to re-allocate the .25 percent Ute Lake water tax with councilman Jimmy Sandoval and Mayor Pro Tem Antonio Apodaca voting no. If the second reading is approved, citizens will vote to pass or block the ordinance.
Commissioners will first read an ordinance enacting a .25 percent municipal gross receipts tax increase at their Dec. 9 meeting.
If the commission votes to approve the tax increase, no public vote is required to enact it. Citizens must petition the council by collecting signatures from at least five percent of Tucumcari residents who registered to vote in the November midterm elections.