Albuquerque council rejects gross receipts tax hike again

Albuquerque's next budget fight is now about what the city can afford without new money. The City Council again rejected a 0.4875 percent gross receipts tax hike that supporters said would have brought in about $113 million a year for city operations, neighborhood projects and cost-of-living increases, leaving officials to find another way to cover street work, staffing and other pressures.

The ordinance, called the Community Enhancement and Local Investment Tax, failed 5-4. Dan Champine, Tammy Fiebelkorn, Renée Grout, Dan Lewis and Stephanie Telles voted no, while Brook Bassan, Klarissa Peña, Nichole Rogers and Joaquín Baca voted yes. The measure would have raised Albuquerque's gross receipts tax rate from 7.625 percent to 8.1 percent and put the question on the November ballot.

The June 15 defeat was the second time in four months that a similar proposal collapsed. A version of the plan failed March 16 after more than an hour of debate, with Albuquerque city workers packing council chambers hoping the money would help fund raises. That earlier proposal was tied to infrastructure, fee cuts and higher pay for the city's lowest-paid employees, and amendments changed it enough that supporters said its original purpose was lost. One March amendment from Fiebelkorn would have cut the annual revenue effect to about $30 million, far below the original roughly $113 million target.

The fight keeps returning because gross receipts tax remains central to Albuquerque's finances. The city's FY25 budget said gross receipts tax was expected to supply 41 percent of total resources, while the FY25 ACFR said gross receipts tax revenue and state-shared taxes and fees together made up about 52.8 percent of governmental activities revenue. Public safety accounted for 32 percent of appropriations and public infrastructure 20 percent, so each tax debate quickly becomes a decision about roads, buildings and staffing.

Supporters argued Albuquerque would still have had a lower gross receipts tax rate than 30 other New Mexico cities if the increase passed, and KUNM reported the city already had the second-lowest rate among the state's five most populous cities and towns. Even so, the council's opposition held again, and the city will keep sorting through the same tradeoff: raise a broad consumer tax or trim, delay or redesign the projects bundled into it. The proposal would also have added about 49 cents per $100 spent, a small change on paper that would have rippled through households and businesses across Bernalillo County.