Amidst months of discussion and debates over budget gaps and fire service costs, town commissioners asked the town’s Economic Development Advisory Board to evaluate a proposal to raise local taxes to incentivize new growth in Edgewood.
Grant Taylor, a local economic development specialist who works with PNM and other large industries in the state, pitched commissioners in March on a new option available under state law: Raising local gross receipts, sometimes known as sales tax, to build out sites for new businesses seeking to expand or relocate into the Edgewood area.
As Taylor explained, a new state law passed in 2019 but not widely used allows local governments to add up to a 1/4-cent tax — equal to 25 cents on every $100 transaction except groceries — to the town’s gross receipts, then set those funds aside for economic development uses. Creating a special fund ensures funds are available when a business comes looking, he says, so that commissioners do not have to cut today’s operational services to fund future growth. The state and larger communities have used similar funds to subsidize the construction of buildings and equipment for large projects like Netflix in Albuquerque and New Bridge, an agricultural manufacturer, in Moriarty.
A new tax hike would have to be passed by the commission and then approved by voters. In Edgewood, the new 1/4-cent tax could create about $500,000 annually, Taylor’s projections showed. That could be expanded if Santa Fe County also passed a similar tax to match local Edgewood investments.
Among the approved uses could be developing sites for “commercial enterprises for storing, warehousing, distributing or selling products of agriculture, mining or industry,” incentives for new restaurants and lodgers, facilities for farmers’ markets and cultural facilities, so long as the town could reasonably show that the new business would generate net new sales and taxes.
While some commissioners expressed skepticism at raising taxes, the commission ultimately agreed to ask the town’s Economic Development Advisory Board to review it and make recommendations to the commission, though they would have to act fast if the town wanted to place the tax question on the upcoming November election ballot. Commissioners would have to publish, debate and vote on a question for voters before August 25. The advisory board’s recommendation is expected to come to the commission in July.