Rio Rancho broke the streak. No other New Mexico city or municipality that we know of is proposing an increase in the gross receipts tax to balance their city budgets, all ravaged by the brutal recession. But Rio Rancho City Manager James Jimenez is asking the city council to boost the sales tax a quarter cent to help resolve a $3.6 million deficit for the budget year that starts July 1st. It's estimated the tax would bring in about $700,000 a year. Rio Rancho's gross receipts tax is already over 7 percent.

Jimenez casts Rio Rancho's revenue future as vastly different from its present in justifying the boost. He says gross receipts taxes will begin to grow again when tax revenue generated by the spending of Hewlett-Packard and its employees at is new customer service center comes on line, as well as that of the proposed Green 2V solar plant that promises to employ over 1,500.

Will such private sector projects really generate revenue equivalent to that of the late, great Rio Rancho housing bubble, or should the city take a long, hard look in the mirror and rather than raise taxes to maintain a government sized for a housing boom, further downsize itself for a lean future?

Jimenez proudly announces that his budget avoids, layoffs, furloughs or salary cuts of city employees. In addition to the tax increase, Jimenez proposes a wide array of fee increases. But should the focus of the city budget be solely to avoid at all costs all pain for public employees? Rio Rancho's Intel has shed several thousand jobs; the construction industry has probably lost a similar amount in the area and housing values have plunged for those who live there. There has been deep private sector pain and a gross receipts tax increase hurts lower, middle income and unemployed workers most.

SIZING IT RIGHT
Jimenez
Jimenez has spent an entire career working in government so his bias is perhaps understandable, but his proposed budget puts all the pain on the citizens of Rio Rancho and very little--too little--on public employees. He does not even mention in his budget summary the pubic safety agencies that gobble the lion's share of the cash--fire and police. Are they sized right for the future?

The manager warns that if none of his proposed "revenue enhancements" were enacted, the city would have to cut the salaries of all city employees by 8.8 percent.

That Jimenez considers this Draconian is a testament to the disconnect of the political and government classes to the real world economy. Pay cuts of that scope are common now in the private sector. And ABQ Mayor Berry just proposed a three percent cut for all city employees as an alternative to raising taxes. Also, nixing the gross receipts tax would cost $700k. That money could be made up through short furloughs or small salary cuts, nowhere near 8 percent.

Maybe Jimenez and Swisstack are mindful of this, but want the city council to be the bad guys and make the cuts. Whatever the case, shouldn't Rio Rancho entertain salary reductions before increasing taxes on those least able to afford them?

Rio Rancho had an epic boom and has grown to a city of some 80,000, but the city was founded on the notion of an ever-expanding housing base. Obviously, that is not going to happen in the immediate years ahead.

The Rio Rancho City Council and Mayor Swisstack need to reject the city manager's tax increase proposal. First trim all the fat from the Bull Market years and then it will be time to look at tax plays.

STU GOES GA-GA
Rothenberg
The best press ABQ GOP congressional candidate Jon Barela has received is not in the district, but in faraway DC where political pundit Stu Rothenberg is going ga-ga for Jon. He comes with this:

..Barela’s appeal is real. In a recent interview in the nation’s capital, he came across as thoughtful, mature and likeably low-key. His issue positions and party label aside, he’s the kind of candidate almost any voter would think would be an asset on Capitol Hill.

...Republicans have already coalesced around the attorney and businessman. He has considerable appeal to district Hispanics, in part because of his heritage, but also because, unlike most Republicans, he doesn’t favor the dismantling of affirmative action programs and backs a comprehensive solution of the nation’s illegal immigrant problem.

Because of the national mood favoring the R's, Stu has reclassified the ABQ district held by Dem Martin Heinrich from "Dem favored" to "leans Dem." But he comes with a case of the DC "ifs" before going over a cliff for Jon. He says as long as Barela raises enough money--which he hasn't--and if the national mood remains unchanged--which is an unknown--Barela will take the race "down to the wire."

Well, you can bet that Jon will be passing around Stu's gushing analysis to help him raise that money. And while we are unabashed fans of Stu and fellow handicapper Charlie Cook, in this cycle they are seen by some independent observers as tipsy toward the R's. Could that be because they were so late in '08 in calling the Obama wave?

Rothenberg may also have come off the rail a bit when he said "cap and trade" is going to be a big issue in the ABQ race. Say what?

And immigration has never played a prominent role in ABQ congressional campaigns. Just ask former Republican Congresswoman Heather Wilson who rarely mentioned the matter in her successful runs.

While we don't see Barela and the R's riding a wave of marginal issues such as cap and trade and immigration, the poor local economy does provide him with ample openings to tear into Heinrich. And he is likable.

If the R's are going to take back the seat they controlled for forty years, their best chance of doing it will be this first re-election test of Heinrich.

Rothenberg and other DC pundits are also back saying that the defeat of southern Dem congressional contender Harry Teague is "almost certain." Stu now ranks the race as "lean Republican" from "toss-up."

The DC crowd is right that Teague is on the ropes, but analysts here are more circumspect, waiting to see how the campaign with Republican Steve Pearce unfolds. They note that the early polling still gives Teague a fighting chance.

And it is still April.