City Councilor Chuck Wilkins is hoping to see Rio Rancho voters pass a change in the local higher education gross receipts tax this summer so it can take effect next January.
At a town hall meeting he held at his insurance office Tuesday, Wilkins spoke of his plans to propose a measure that would split the quarter-percent gross receipts, or sales, tax that now goes into a fund for building facilities for four-year universities. One-eighth of a percent would continue to go toward higher education facilities, while the other would be redirected to public safety.
“This is a Band-Aid right now, but it’s getting us in the direction we want to go,” he said.
University of New Mexico President Bob Frank has said voters support the UNM West campus in Rio Rancho and won’t approve the change.
Frank said if they did, it would “vastly change our ability to function.”
Frank spoke about the future of UNM West during a town hall meeting at the campus April 29, but didn’t give specific plans.
Since the last legislative session, the state has allowed local governments to institute up to three-eighths of a percent in new gross receipts taxes. So the one-eighth percent moved from higher education would be earmarked directly for public safety.
Before the session, the city had maxed out on the gross receipts tax it could levy for general fund expenditures, including public safety.
“It will be the voters that decide,” Wilkins said. “It won’t be the governing body that decides.”
Because voters passed the tax in 2008, a majority of them have to approve any change before it can be implemented.
The quarter-percent higher education sales tax has been raising about $2 million a year. If it were split, higher education buildings and public safety would each get $1 million year, assuming the tax brings in the same amount of money.
Wilkins said that tax revenue is expected to go up.
How the public safety money would be divided between the police and fire departments each year would depend on needs and priorities at the time, he said.
“That’s the prudent thing anybody would do,” Wilkins said.
He would like to hold a special election on the matter between July and September. This fiscal year’s budget included $55,000 for a special election.
With Wilkins’ proposed schedule, if voters approved the changes, they could go into effect Jan. 1, 2014. If the city waits until the regular municipal election scheduled for next March, state requirements for implementing the changes would keep an approval from taking effect until July 2014 or January 2015, he said.
“I’m going to be the first one to tell you, education is important,” Wilkins said.
He said youth need a college education to get ahead and all three of his children will go to college. However, he doesn’t believe cutting the higher education tax by half will hurt the community’s children.
UNM West is the only institution using the gross receipts money now, but other four-year universities could also arrange a deal for some of it.
“It has to be for bricks and mortar or infrastructure,” Wilkins said of the tax.
Wilkins said UNM hasn’t asked for more money beyond the agreement in which the city committed to help build the Rio Rancho campus. With the money that has accumulated in the account, he said, the city could fulfill its obligation and have $1.3 million left over.
Between the gross receipts tax money and supplying some of the infrastructure for the campus, Wilkins said, the city will have paid more than $8.4 million, or almost 64 percent of the cost of the UNM West facility.