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Monday, March 05, 2018

Keller Rolls The Dice On Tax Hike Without Voter Approval; Rush Is On To Approve Controversial Boost; Necessary Or Funding The Government Of Yesteryear?  

Mayor Keller
Mayor Keller and the ABQ City Council are on breakneck speed as they rush to approve a three-eights of a cent increase in the gross receipts tax, with the measure before the Council today.

There is no sunset on the proposal. It would be permanent and take the tax to just under 8 percent.

Keller has all but signed off on it, releasing a report that decries the city's financial situation but that pooh-poohs budget cuts as unreasonable or too painful, even as it it presents them as alternatives to a tax increase.

However, when it comes to the proposed GRT hike the report does not point out any negative consequences, including the fact that it is felt most by low income households and that businesses could also suffer because a high GRT can stifle economic development.

The new mayor's popularity is going to take a hit for the tax increase. He pledged during the campaign that a tax that would in large measure go for public safety--like this one--would be presented to the voters. By walking back that pledge, he will pave the way for Republicans and independents to coalesce in opposition. He can afford some slippage since he was elected with 62 percent of the vote. But after the tax increase the city's politics will be more polarized and Keller will have a bigger target on his back.

Ultimately, Keller's fate will rise or fall with the crime rate. If there is a tax increase and crime shows a notable decline, he'll be hailed. If not, he'll be labeled a heel.

WHY NO VOTE?

Former ABQ City Councilor Greg Payne has this reasoning on why the Council is so determined not to send the tax to voters:

The Council won't send this tax out for a vote because they know it will be voted down. The public isn't inclined to pay for the past eight years of the City Council's complacency, incompetence and malfeasance. But just like ART the public is right about this tax. It needs to be axed--along with the City Hall fat no one seems willing to go after.

EPIC MISMANAGEMENT

Ex-Mayor Berry
The administration's report reveals some of the epic mismanagement that occurred under Mayor Berry and which the City Council did little, if anything, to thwart. It was sad to read of the ransacking of city departments, financial hocus pocus, the city's stagnant economy and the woeful state of public safety. Not that we were unaware that the Berry gang was running amok. But it's sad that as a community--the City Council, business interests, citizen activists and we in the media did not do more to rein in Berry.

Keller will do better. The bar is low. But his rush to embrace this tax increase and ignore those calling for bold reforms to right size the city after eight years of recklessness is redefining him as a more cautious personality. Reader Ezra Spitzer explains it best:

The revealing quote is this: "Keller said the GRT tax increase represented the “least worst option."  It seems the new mayor is already operating in an echo chamber. The easiest solution is rarely the best solution. 

There seem to be two primary drivers of the budget imbalance--poorer than expected economic activity and a poorly run city. We all know the gross receipts tax rate is already too high and therefore we carve out a million special interest exemptions to it which further undermines the revenue from it and makes the tax even more regressive to working families. Furthermore, raising the rate certainly won't address the stagnation in the economy. If anything it will have the opposite effect. And even if it were the best short-term option wouldn't you promise a sunset one year from now?

We have to find real solutions to our revenue problems not ones that fall disproportionately on the poor and further widen the divide between the rich and poor. We need bold leadership willing to listen meaningfully to the community and to take a stand.

BOLD LEADERSHIP?

So what is bold leadership? Well, slow the budget train and fully audit each department and not just proclaim that "Mayor Berry already cut everything." That's a blanket assumption not a plan.

What the mayor and the Council and so many others cannot bring themselves to admit is that ABQ is not the city it once was and the odds are there will be no reversal in our economy anytime soon.

Albuquerque had the lowest population growth of 10 major cities in the region, and it continued a six-year population stagnation. Since 2010, the city’s population has grown by 13,142 people, or 2.3 percent. As of July 1, 2016, Albuquerque’s population was 559,277.

We are funding a government designed for yesteryear when this place was booming. There is a way to avoid this tax, or at least minimize it, if the City Council and Mayor don't panic. Take a look:

--The city's financial report assumes it is essential to have 1,200 cops but that rings hollow when you look at the immense cost. How about budgeting for 1,000, get there and then look around? That would be an increase of nearly 20 percent and even that will take several years to achieve.

--The city's report says if 200 currently unfilled positions are left vacant the annual savings would be over $13 million, Some of those positions are vital, but City Hall can't make the tough decisions to save $8 million there? It would go a long way to resolving the projected $40 million deficit for the budget year that begins July 1.

--Another cost cutting alternative is to sell Ladera Golf Course for $1 million in annual savings. Do that and then realize millions more by selling the land to a motivated private developer who can deal with the drainage issue opponents say prevent a sale. (By the way, there has been an explosion in golf course options here, even as fewer participate in the sport).

--Why aren't the city's hefty legal contracts targeted for savings in the administration's report? These are the most well off citizens who should be called on to sacrifice--not just low income households that would be most impacted by a GRT increase.

--Needless to say, not one of our leaders downtown have the stomach to even broach  the idea of redirecting a portion of the BioPark tax to public safety even as they call public safety "a crisis."  And where is the Council and media oversight over how effectively that money is being spent?

That's just for starters. Then there's the city travel budgets, take home vehicle policy and overtime and sick time abuse. No mention of that. At all.

To reiterate what reader Spitzer said: "We have to find real solutions to our revenue problems. 

Hiking city taxes with no accountability for the excesses and incompetence of the previous administration and City Council will simply paper over the long-term problems that will continue to fester and lead to more tax increases and more stagnation. No wonder the Council is anxious to push it through. But the Mayor can and should do better.

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(c)NM POLITICS WITH JOE MONAHAN 2018
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