City Councilor Dan Lewis cast the sole vote to cut taxes for Albuquerque residents this week.
The proposal was not controversial. Lewis pushed a one-quarter of one percent cut to the city’s Gross Receipts Tax, which was raised in March 2018 to offset what was then expected to be a $30 million revenue shortfall.
“[T]he City has managed to evade layoffs and other financial hardships and appears well positioned to continue to fund critical services; and whereas, given that the initial public safety purpose of the tax has now sunset, and given the relatively strong fiscal footing of the City going forward, the City should repeal the 2018 Increment as a way to assist consumers and businesses.”— Council Bill No. O-18–9: “To Rescind One Eighth Of One Percent (.125%) Of The Overall Three Eighths Of One Percent (.375%) Gross Receipts Tax”
The tax increase more than did its job.
Lewis explained that not only did the tax hike generate more than $30 million the first year, but it is anticipated to rake in $70 million this year alone, more than making up for what it was originally intended for.
“We have in every sense really unprecedented revenues in our city right now,” he said at the council meeting Monday.
Lewis pointed out that the state legislature was set to vote on a $690 million tax refund — $1,000 per household — because it too has more money than it knows what to do with.
“I don’t think there’s ever been a time, probably in the recent history, where we’ve had that much of an increase in revenue. And so, as some have said, we’re swimming in cash right now.”—Dan Lewis, ABQ City Council
The state is considering such a significant tax rebate for New Mexicans, he explained, “because they know that if they were going to allocate those resources as reoccurring expenses, then they’re going to be faced in future years with having to sustain that kind of spending.”
Lewis proved Monday that he was either the only councilor who understands how the government leviathan continues to grow, or the only one willing to stand and fight against it.
In government as in business, there is a feast-or-famine cycle that makes it easy to give when business is booming but difficult to take away when times are hard. This is even truer in government than the private industry, because the revenue politicians play with is not theirs, and because the burden of taxation is spread among hundreds of thousands rather than the tens or hundreds of employees in the private industry.
“We know that the Albuquerque City government is awash in cash and we know that the state of NM tomorrow is — because of the inflation that we are experiencing in this country — going to return some money back to the taxpayers, on top of some money they already returned. The city of Albuquerque, being awash in cash as well, with the budget up 27% under Mayor Keller, can at the very least return to Albuquerque taxpayers just one eighth of a cent on the gross receipts.”— Paul Gessing, Rio Grande Foundation
The GRT debate epitomizes one of the biggest failures of government. The tax increase more than did its job, yet once it’s in place, politicians can’t seem to part with all the extra revenue. And their justification isn’t unreasonable: What’s one eighth of one percent?
The $26 million that this bill would have cut from city coffers is a drop in the bucket when re-distributed to the individual resident, equating to fractions of a penny for every dollar spent.
But it’s exactly that perspective that contributes to the continuous inflation of government.
Fractional increases over many years create excesses in government just as fractional decreases in tax rates over many years add up to thousands of dollars back in the pockets of residents.
Either way, that money gets spent. The question is who should spend it? Government–on social programs benefitting some–or residents, whose consumer choices keep local businesses operational, local wages competitive, and local products in demand?
The city collected $116 million more in tax revenue this year than what was budgeted for in the previous year, but Albuquerque “leaders” refuse to part with $26 million of your money for the simple reason that they believe they know better than you how to spend it.
“They” are Brook Bassan, Isaac Benton, Pat Davis, Tammy Fiebelkorn, Renee Grout, Trudy Jones, Klarissa Pena, and Louie Sanchez.
Dan Lewis may be the lone voice in the wilderness of government bureaucracy, but, as the saying goes, even if you are a minority of one, the truth is the truth.
Categories: Albuquerque City Council