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Thursday, March 20, 2008

Letters to the Editor

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    Gross Receipts Tax
    Small Price To Pay
    In a letter dated March 7 to the Edgewood councilors, an advocate of reducing the gross receipts tax rate in Edgewood to a point ". .. a little less than Albuquerque's rate," offered several suppositions. To find out if those ideas have merit, the facts must be examined.
    The gross receipt tax rate in Edgewood is 7.625 cents for every dollar spent for taxable goods and services, and the gross receipts tax rate in Albuquerque is 6.875 for every dollar spent for taxable goods/services. Put another way, it is 75 cents less expensive to purchase $100 of taxable goods or services in Albuquerque than for the same amount of taxable goods and services purchased in Edgewood. The gross receipts taxes collected in Edgewood include an amount of 1.125 cents that Santa Fe County imposes for every dollar spent for merchandise purchased in Edgewood. But, keep in mind that food and groceries purchased for consumption off premises of the business where purchased and some other products and services do not require the payment of gross receipts taxes.
    More important than the total gross receipts tax of 7.625 cents on a dollar purchase is the actual portion of the 7.625 cents passed on to Edgewood. That initial amount is 2.725 cents on a dollar purchase, leaving a remainder of the total 7.625 to be gobbled up by the State of New Mexico and the County of Santa Fe. Of the 2.725 cents received by Edgewood on every taxable dollar purchase, 0.25 cents is paid by Edgewood to Santa Fe County to help pay for fire and emergency medical service, leaving 2.475 cents of every taxable dollar purchase. This amount, multiplied times the total taxable dollars spent in Edgewood is all that is left to pay for the operational and capital outlay needs of the town. A half-cent of the 2.475 cents is dedicated to financing the police department's operation, leaving 1.975 cents of every taxable dollar spent to pay for all other town government services. And, there's even more. Remember, the idea would have Edgewood's taxes lowered to less than Albuquerque. Since we don't know how much less, then let us just lower Edgewood's rate to Albuquerque's present rate of 6.875. We will now subtract an additional amount of .75 cents per dollar spent from our balance of 1.975 leaving an actual 1.225 cents for every taxable dollar spent.
    Your town government has pledged to provide road maintenance and upgrades, a public works administration and maintenance facility, a library, youth and adult playing fields, a completed sewer and a regional animal shelter. In a few years, if not sooner, Edgewood will be required to either contract with an existing waste disposal company and landfill or establish both on its own. I don't believe our town government can accomplish all we expect with the amount left to work with should we decrease our gross receipts tax to a level below Albuquerque's. Now is not the time to think about lowering our gross receipts tax. We do not have an actual history on the proceeds from the new Wal-Mart and we certainly do not have actual figures for our wish list of capital improvements and the day to day operation of town government.
    Rather than lowering the gross receipts tax, why don't we think about fulfilling our pledges to complete community projects. It seems the only reason we might want to latch onto the idea of reducing our gross receipts tax is to curtail community development and citizen services. Remember, people from far and wide shop in Edgewood and many of those shoppers have little negative monetary impact on Edgewood as they leave the town after their shopping trip.
    Finally, when we endeavor to encourage our citizens to "shop at home," why don't we appeal to their loyalty to Edgewood and ask that they invest in their local businesses when they spend their money, rather than to spend their money in Albuquerque to save what amounts to a rather minuscule sum. In doing so, they might get a "warm fuzzy attaboy" in addition to improving their quality of life and increasing the value of their property when tax money is spent for public projects in Edgewood.
    CHUCK RING
    Edgewood