By Chuck Ring (GadaboutBlogalot ©2009 – 2010)

Quote Freely From The Article – Leave The Pseudonym Alone

The Governor of New Mexico has vetoed the gross receipts tax on food which would have went into effect on July 1st of this year.  This bill was to be a solution to the State’s taking away the so-called “hold harmless” money which was to make up for loss of taxes on food when gross receipts tax was removed from food beginning in 2005.  Since there is no mention in the press release from the Governor’s office that the hold harmless money will not be taken away from the counties and municipalities it looks like it is to be stopped.

With the tax being vetoed and if  the hold harmless money is no longer available, many cities, towns and villages in New Mexico will face steep cuts in their operating budgets.  As an example, Edgewood may receive up to $800,000 less over a year because the State has removed the hold harmless money.  That is an amount which will be removed from  roughly 3.1 million dollars ordinarily received  through gross receipts taxes and hold harmless money.

To put the loss of revenue in perspective, $800,000 is close to the entire Edgewood Police Department budget. The police department budget is probably safe, as there is a requirement that gross receipts taxes received (1/2 cent on a dollar) for the police department cannot be used for any other purpose unless the money reaches a surplus.

Now if  the loss of the hold harmless monies goes forth, it will be necessary for the Town’s governing body to drill down for solutions to this loss of revenues.  Of course, that (reasoned solutions) is why the members of the governing body were elected to their positions and I believe they are likely to seriously rise to their responsibilities.

The budget process for the coming fiscal year will begin shortly and the overall process will be open to the public.  Here’s hoping that the citizens of Edgewood will participate in the process with understanding and viable suggestions for resolving the budget issues.

Perhaps there is some hidden action taken by the Governor that will make sure the counties and municipalities will be able to hold their budget at present levels, if not to have money which will allow projects to continue.

We’ll let you know if we hear or see anything else.

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