By Nicholas House
Sun Correspondent
McKinley County commissioners heard a presentation Dec. 16 on a proposed local gross receipts for spurring economic development, but several commissioners questioned whether the approach would deliver meaningful results in a county with a shrinking population, housing shortages, and a limited tax base.
Grant Taylor, an economic development specialist with New Mexico’s largest electricity provider PNM, presented on the Local Economic Development Act and a related gross receipts tax increment that counties may place before voters. Taylor said the tool is designed to generate dedicated revenue for job creation, infrastructure, and quality-of-life projects.
“Generally, developers consider economic development as programs, activities, and policies that seek to improve economic well-being and quality of life for a community, particularly through creating and retaining jobs, as well as stabilizing the tax base,” Taylor said.
Taylor told the commissioners that McKinley County has a strong history of professional economic developers but has lacked sufficient funding to support long-term efforts.
“It takes resources to do the work,” he said. “Historically, New Mexico has underfunded economic development.”
Under state law, counties may ask voters to approve up to one-eighth of 1% in additional gross receipts tax for economic development. Taylor said the increase would equal “12.5 cents for every $100 in purchases” or “one cent for every $8 in purchases,” and emphasized that the tax doesn’t apply to groceries. He estimated it would generate nearly $2 million annually for the county, with restrictions under the Local Economic Development Act.
“Every expenditure has to be approved in a public meeting,” Taylor said. “There’s a great deal of transparency. It’s something that your voters can track and hold you accountable to.”
Commissioners, however, expressed skepticism about whether the tool would work locally. Chair Commissioner Robert Baca, Jr., Dist. 3, said past economic development efforts promised hundreds of jobs that never materialized.
“You told us in five years we’d have 500 jobs,” Baca said. “We don’t have 500 jobs. We don’t have industry.”
He also pointed to McKinley County’s limited tax base and workforce challenges, noting that many local businesses struggle to retain employees.
“We have a 19% property tax base here,” he said. “We’re not making money.”
The commissioner also questioned comparisons to Texas communities, where sales taxes for economic development are common.
“I can’t compare Texas to Gallup, New Mexico, or communities like Gallup,” Baca said. “I’ve got to take into account everything else.”
Commissioner Walt Eddy, Dist. 2, said the proposal deserved further discussion but emphasized the need for public input before moving forward.
“I’d like to have a meeting, get some public opinion, what the public thinks on it,” Eddy said. “But right now, I’d say let’s not put it on the ballot.”
Taylor responded by saying that the presentation was meant to show how local governments can create their own capacity rather than relying solely on state funding.
“If you can’t do anything else with property taxes, you do have an opportunity to generate some revenue with gross receipts tax,” he said. “In this way, you can take destiny into your own hands.”
Taylor also cited recent voter approvals of similar measures elsewhere in the state. He noted that the village of Los Ranchos, N.M. passed a similar measure with a vote of 62–38 and Lordsburg, New Mexico passed it with a vote of 65–35.
He said those communities tailored the tax to their identities and priorities rather than attempting to replicate other regions.
“We don’t want to be anybody else,” Baca said. “We want to improve who we are.”
The commissioners took no action on the proposal. They indicated the idea requires additional analysis and community discussion before they decide whether to place the measure on a future ballot.
