Wednesday, February 21, 2018

ABQ Tax Increase Debate: How Big Is Deficit Really? Readers Question Council; Where's The Audit Of The Berry Books? Cost Savings? ART Finance Records Hard To Find For New Mayor 

About that proposed tax increase that's being taken up by the ABQ City Council this week. First, possibly a bit of good news:

Councilors Ken Sanchez and Trudy Jones want to increase the gross receipts tax by three-eights of a cent to raise about $55 million a year to fix the budget deficit for the year beginning July 1 that is put at $40 million. However, downtown bean counters that have been through this before say don't be surprised if in the next projection before July 1 that number comes down by $5 million or even $10 million. That could put further pressure on the council and Mayor to hold off on a tax hike.

A chief reason City Hall is getting resistance to raising taxes is because a lot of folks want to know just where all the money was going under the 8 year tenure of Mayor Richard Berry. Reader Dan Klein is one of them:

How about all the salary savings from vacant police officer positions over the last 8 years? It amounts to close to $100,000,000 where did that money go? APD was budgeted for 1,100 officers and then the city council decided to only budget for 1,000 officers during a time where APD has only had 800 to 900 cops. Each officer costs about $100,000 per year (salary, equipment, benefits) where has that money gone?

The State Auditor needs to step in right now. Has the past administration and the city council misspent millions of our dollars? A complete audit by an outside agency is the only way to find out.

Obviously the vacant savings went to other city agencies, but where? How much? And on exactly what?

And an interesting sidebar: Klein called for State Auditor Wayne Johnson to conduct the outside audit of the city. Johnson is a former BernCo County Commissioner who was one of Keller's foes in the '17 mayoral race. He finished fourth in the first round of voting and failed to advance to the run-off. But when Keller was elected Gov. Martinez appointed Johnson to replace Keller as State Auditor.

It could be pretty rough waters if Johnson starts sniffing at the City Hall books. Who would Mayor Keller rather have doing that? Johnson or himself. Time to get ahead of the curve, Mayor?


One of our Senior Alligators checks in to tell us that City Hall is having trouble rounding up all the financial records for the $135 million hyper-controversial and stalled out ART project for Central Avenue. He advised: "A forensic audit apparently is needed."

And what is a forensic audit? Glad you asked:

Forensic audits are used wherever an entity's finances present a legal concern. For instance, it is used in cases of suspected embezzlement or fraud, to determine tax liability, to investigate a spouse during divorce proceedings or to investigate allegations of bribery, among other reasons.

That sound you just heard was former Mayor Berry dropping his coffee cup to the floor when he read that paragraph.

And we're supposed to approve a tax hike before we get a look at whatever kind of horrid creepy-crawler comes out of that deal?


Readers continue to pick apart the proposed tax increase with research like this from Alan Schwartz:

Joe, does anybody really know how much it is going to cost to have 1,200 sworn officers versus the 850 number? An additional 350 rookies (out of the police academy) at $20.44/hr for 2,080 hrs/yr is almost $15 million. Then you have to add in the $5,000 signing bonus, health and pension benefits, more vehicles, and civilian support positions. Lateral employs start at a higher rate. The City Council owes it to the public to give us the real numbers, not Spaceport accounting.

"Spaceport accounting?" Now that's good blogging. . .

We reported that former ABQ Dem Mayor Jim Baca believes the GRT hike would be regressive and hurt the poor most. He adds:

The City is in a big money pickle. The malfeasance in the city council and Mayor Berry's office has brought on a true financial crisis. Of course, the council now wants to raise the most egregious tax they can, the extremely regressive gross receipts tax. Don't. Just raise the gas tax 10 cents a gallon and take care of half of the deficit that way. Really, it is a user tax at the end of the day. Gas just cost half of what it did a few years ago so it won't be too painful. Also, don't even think about earmarking money from a new tax for any single entity, including the Police Department. Not long ago the voters gave the BioPark their own 1/8th cent tax. That money could be used elsewhere right now. Time for common sense.

Common sense indeed. Weeks ago we raised the possibility of diverting some of that $18 million in annual capital money that is flowing to the BioPark from a one-eighth of a cent tax to assist in resolving the budget mess. You would need to ask voters to do it but they would probably jump at the chance so they could avoid taking the GRT rate up to nearly 8 percent, put an end to the overfunding of capital projects at the BioPark and getting on with restoring APD.

But don't ask voters for that favor before a complete auditing and reform effort at City Hall is instituted.

Community activist Chris Catechis comes with a long-term plan for solving the city's fiscal plight:

Instead of raising taxes on a struggling tax base, at what point can we have a serious conversation about consolidation of city-county government to find efficiencies by getting rid of duplication of services?

We have 9 city councilors and a Mayor, Chris. You would think at least one of them would start that conversation. Will we get that sort of leadership?

Reader Ezra Spitzer writes:

Thanks for Monday's blog about the proposed gross receipts increase in ABQ. Your are one of the few raising all the right points about this. This city deserves bold leadership... Not more of the same... disappointing.

Thanks, Ezra, we'll stay on the beat.


GOP US Senate candidate Mich Rich probably needs to go up on TV now and stay up until November if he is to have much of a chance at upsetting Dem US Senator Martin Heirncih, but Rich can't afford that so he's kicking his media off with a statewide radio buy.

In the 60 second spot Rich calls out Heinrich for voting against the big tax cut approved by Congress in December saying, "Our new mexico senator has fought these cuts and New Mexico is being left behind. . ."

Heinrich said he voted against the tax cut because it amounted to Republicans "recklessly blowing up the deficit in order to reward their wealthy friends and corporations with a tax cut that they do not need."

Rich has also named a state campaign chairman, but it appears he was off by about 100 years when it comes to the heritage of his new chief:

Rick Lopez of Estancia will serve as state campaign chairman. Lopez is the current First Vice-Chair for the New Mexico Republican Party. He has more than 10 years of experience as a county chairman, and many years of grassroots political organization experience. His family has been in New Mexico since 1498.

Of course you knew that it is 1598 when the first Spanish settlers and ancestors of Rick Lopez came to New Mexico--not 1498.

Mick Rich, welcome to the Alligator infested waters of La Politica. The never miss a meal.

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