By Molly Ann Howell
Managing Editor
The McKinley County commissioners will soon consider a 0.4375% increase in the Gross Receipts Tax.
The commission held a special meeting March 10 to authorize notice in local newspapers for a future meeting on March 27, when the commissioners will vote on the tax increase.
During the March 10 meeting, Stifel — a Santa Fe-based public finance group hired by the county — presented information regarding the potential raise.
Currently, McKinley County (excluding the City of Gallup and the Pueblo of Zuni) maintains a GRT rate of 6.5%. The proposed increase would bring that rate to 6.94375%.
Stifel representatives estimated the increase could generate almost $5 million in annual revenue for the county.
Commission Chair Robert Baca, Jr., Dist. 3, asked the county’s Finance Director Sara Keeler how the tax would affect purchases.
Keeler explained that under the current rate, a $100 purchase carries an $8.06 tax. The increase would add 44 cents, bringing the total tax to $8.50. On a $500 purchase, the tax would increase to $2.19.
New Mexico statute requires municipalities to deposit all GRT earnings into their general funds.
Baca noted that the county has struggled for years to complete projects such as Carbon Coal Road because of rising material costs.
“Every time we get kind of close to wanting to do something, prices keep going up,” Baca said.
He shared a personal anecdote about a vendor who charged him an extra fee to cover gas costs, using the story to illustrate the county’s need for additional revenue to fund essential infrastructure.
“If we don’t increase [the tax], we’re going to be hurt on our own facilities,” Baca said. “You can’t build or maintain infrastructure unless you have revenue.”
County staff estimated that the last time the GRT was raised was in either the ‘80s or ‘90s.
Commissioner Danielle Notah, Dist. 1, agreed with Baca, describing the increase as an investment in the community. Commissioner Walt Eddy, Dist. 2, did not attend the meeting.
PUBLIC PUSHBACK AND CONCERNS
Stifel representatives noted that if the commission intends to raise the tax, they must make a decision by the end of March for the rate to take effect in July.
During the public comment window, Peter Campos, the new CEO of the Gallup/McKinley County Chamber of Commerce, questioned the timing of the proposal. He asked why the county waited until three weeks before the deadline to bring the issue to the public rather than discussing it six or nine months ago.
County Manager Anthony Dimas responded by saying that staff and commissioners worked on the proposal behind the scenes for months.
City of Gallup representatives Mayor Marc DePauli and City Manager Frank Chiapetti, Jr. also raised concerns. Chiapetti questioned whether the higher rate would deter business owners from moving to the area or negatively affect the new trade port.
Former Chamber CEO Bill Lee echoed these sentiments.
“When do we reach a threshold where it begins to drive consumers away from McKinley County so that we’re actually seeing less GRT vs. them actually staying and spending money?” he asked.
Baca thanked the speakers, acknowledging that they had raised concerns he had not yet considered.
Ultimately, the commission voted to approve the ordinance to put a notice for a future meeting in local newspapers. The next meeting to discuss the potential GRT increase is scheduled for March 27.
