City councilors say new deal could cost city

Posted at: 03/25/2013 10:10 PM
Updated at: 03/26/2013 2:50 PM
By: Chris Ramirez, KOB Eyewitness News 4

Some Albuquerque city councilors are urging Governor Susana Martinez to veto legislation that reduces state contributions by more than $250 million over the next 17 years, according to city calculations. 

In the last hour of the 2013 NM Legislative Session, the governor and Senate Democrats brokered a deal that would reduce corporate income tax, create film incentives, and lure in new business to the state.  But those deals came at a price.  Senate Democrats wanted the governor to agree to cut “Hold Harmless Distributions” to cities and counties.    

"This will cost the city of Albuquerque alone over the phase in period over a quarter of a billion dollars," city councilor Ken Sanchez said.

Ten years ago, under the Governor Bill Richardson Administration, New Mexicans paid sales tax on groceries and medications.  The State ended that tax, but cities and counties rely heavily on sales taxes as their primary source for revenue and they opposed the measure.  To continue the same funding levels for cities and counties, the State agreed to give them whatever funds they would have received from grocery and medicine sales taxes, commonly known as “hold harmless distributions.”

"I feel the legislature had maybe 20 minutes to look at this bill in this package before it was passed,” Sanchez said.  “I feel the governor needs to veto the entire package."

Sanchez isn’t alone.  Three other Albuquerque city councilors signed onto a letter strongly urging the governor to veto.  They worry the brokered deal would force them raise taxes on Albuquerque residents or cut services, such as transit, museums, police, or fire.

The Governor’s Office fired back releasing this statement Monday night:

"It is incredibly disappointing that city politicians want to veto a major bipartisan jobs package that includes three of the city council's own stated job creation priorities in order to protect a Richardson-era subsidy. The intellectual dishonesty demonstrated by their math is appalling. The truth is this subsidy will be phased out over almost two decades and represents less than half of the amount the city claims to have cut from its own budget in a single year.  Governor Martinez believes making New Mexico more competitive with surrounding states to help create more jobs will be more effective at increasing revenues to the city and calls on these city councilors to focus on policies that put more New Mexicans back to work."

Albuquerque Mayor Richard Berry’s office wouldn’t say where the mayor stood, whether he wished for the governor to veto or sign the legislation.  A spokeswoman said the mayor is still analyzing the city’s impacts.