LAS CRUCES, N.M. — It took two attempts and even the New Mexico State Supreme Court weighed in on the City of Las Cruces gross receipts tax increase and ultimately decided it will be implemented July of 2014.
The city was hoping to begin collecting a 3/8 of a percent more tax at the start of next year, but is now delayed after the state Taxation and Revenue Department denied the September 3rd ordinance passed by council due to wording.
"We don't want us to become some of the other cities that you hear about," said Mayor Ken Miyagishima, referring to cities in financial crisis.
Miyagishima said council voted to raise the gross receipts tax as a preventative measure after the state legislature repealed the Hold Harmless Act which compensated cities for not taxing food and medicine.
The mayor said the increase would provide some protection against a potential budget shortfall several years later but will have no impact in the near future.
"It's for our future city councils and it's just trying to do the financially prudent thing to do," Miyagishima said.
After the September ordinance was denied, the city would challenge it at the state supreme court but the court did not rule in the city's favor.
In early October, council had already held an emergency session and passed a second ordinance with corrected language.
However that ordinance will not be implemented until July 1, 2014, potential costing the city more than $4 million in the six months difference.
Miyahishima said with rising food costs and online shopping, the city does not see as much revenue from discretionary spending as they have in the past.