RIO COMMUNITIES—Come next summer, anyone buying goods and services in the city of Rio Communities will be paying a .25 percent increase in the gross receipts tax.
By a 3-1 vote last month, the Rio Communities City Council approved an increase in GRT from 7.4375 percent to 7.6875 percent, which will take effect in July 2020.
Mayor Pro Tem Peggy Gutjahr said the increase will bring in about $41,000 to the city.
Councilors Gutjahr, Arturo Sais and Josh Ramsell voted in favor of the increase, while Councilor Bill Brown voted against it. The last time the council increased the GRT was in May 2015, when they approved another .25 percent rise.
Before they voted on the issue, Sais said Rio Communities’ GRT rate was still the lowest of all the municipalities in the county.
“We’re being fiscally responsible and some of these taxes are needed,” Sais said. “Right now, we have to work within our limits, and some of these taxes will enhance the city.”
Ramsell said while he agrees the gross receipts tax is a regressive tax, he believes having the lowest GRT of all municipalities will attract businesses.
“This is part of the reoccurring revenue that the community has that’s not just supported by the residents,” Ramsell said. “This is supported by a broader spectrum of people shopping in Rio Communities. This increase in revenue will help with reoccurring expenses, such as an extra officer, if that’s what we choose to use the money for.”
Gutjahr said the council has been having a conversation for almost a year now about how they will fund another Valencia County sheriff’s deputy to patrol the city.
“It’s been an ongoing request from residents,” Gutjahr said. “Each time we get closer, we’re faced with budgetary issues.
“The concern of imposing a mill levy is for just our residents, who would be paying for it through their property taxes,” she said. “The GRT impacts our businesses, but it’s also for people who come through here who will be paying. I feel this was a little more fair.”
Ron Gentry, a local businessman and developer, told the councilors he was not in favor of the city increasing the GRT, saying it is a regressive tax because that’s what people pay for services.
“When people move in, they ask for the tax rate. This is a start-up community, and I’ve often said that this city can’t live on taxes, fees and fines,” Gentry said. “You have to have businesses and sales and a revenue stream. We need more rooftops to do that.”
Gentry said Rio Communities is competing with Los Lunas for businesses, and if the council decided to raise the GRT, they’d be giving its “competitive edge” away.
He urged the council not to approve the GRT increase, saying they need to attract businesses with value.
Rio Communities resident Abel Romero said while he agreed with some of Gentry’s comments, he asked the council to approve the increase. Romero said the only way to grow the community is to invest in it.
“With value-added businesses, they will produce goods and services, and it keeps the wealth more local,” Romero said. “They are going to attract more businesses and a well-qualifed and motivated work force.”
Romero said a quarter of a percentage point isn’t a large tax increase, and the current low tax rates aren’t attracting businesses anyway.
“This is a modest proposal,” he said. “I want us to have recurring services that our city deserves.”
Councilor Bill Brown said no one likes taxes and no one likes to pay more.
“The problem we have on the city council level is that residents have infinite wants and needs,” Brown said. “Basically, I have opposition to GRT (increase) because it affects businesses, which I think will be regressive. I don’t like the fact it may give us a reputation as anti-business. I would hate to see that happen.”
Clara Garcia is the editor and publisher of the Valencia County News-Bulletin.
She is a native of the city of Belen, beginning her journalism career at the News-Bulletin in 1998 as the crime and courts reporter. During her time at the paper, Clara has won numerous awards for her writing, photography and typography and design both from the National Newspaper Association and the New Mexico Press Association.