McKinley County Pauses Proposed GRT Increase Amid Public Concerns

Every $100 tab at an unincorporated McKinley County restaurant would have cost consumers 44 cents more, and a $500 auto repair would run $2.19 higher, under Ordinance 2026-MAR-001, a proposed 0.4375% Gross Receipts Tax increase the McKinley County Board of Commissioners tabled on March 25 after an outpouring of public opposition.

The increase would not have applied inside Gallup city limits or within the Pueblo of Zuni, concentrating the full weight of the new rate on residents and merchants in the county's rural, unincorporated stretches. A $1,000 transaction anywhere in that zone would have added $4.38 to the bill.

The county had framed the increase as a cure for a persistent funding problem. Commissioners argued that lifting the GRT rate from 6.5% to 6.94375% would create a dedicated local revenue stream for roads, broadband infrastructure, and workforce development programs, reducing reliance on intermittent state and federal grants. To model the fiscal impact and implementation timeline, the county hired a Santa Fe-based public finance firm.

With the vote paused, those projects remain tied to grant cycles with no dedicated local source. No alternative funding mechanisms were named in the pause announcement, and no specific project list had been publicly released before opponents organized.

Local business and nonprofit groups mobilized quickly once the ordinance was publicly posted. Small-business advocates argued the tax would pile onto an already strained cumulative burden for merchants operating on thin margins in a county with persistently high poverty rates. At least one local business coalition publicly characterized the commissioners' decision to delay as a win for Main Street owners who raised concerns through public comments and at community meetings.

Commissioners acknowledged the scope of public feedback at the March 25 meeting and cited the need for additional stakeholder engagement and clearer spending governance before moving forward. County officials indicated they intend to return Ordinance 2026-MAR-001 to the agenda after further community outreach and legal review.

For now, the GRT rate holds at 6.5%, and any economic development spending tied to the proposed new revenue has no funding source on the horizon.