By Roger Lanse

The Silver City Town Council passed a notice of intent ordinance at its Tuesday, Aug. 9, regular meeting adopting a municipal hold harmless gross receipts tax. The following comments by Mayor Ken Ladner explain council's action:

GǣBefore proceeding to consideration of Notice of Intent 1249, I thought it would be helpful if I gave a bit of background as to why consideration of this action is necessary.

GǣIn New Mexico, local governments are only allowed to impose taxes that are authorized by the State Legislature. This authority to give and withdraw creates risk of unstable revenue sources for the dependent local governments.

GǣThe term 'hold harmless gross receipts tax' that you may have heard about is one of the examples of the State making changes in what is taxed. In 2004, the State eliminated the tax on food and some medical. Since food and medical taxes historically were a significant and stable source of local government revenue the State Legislature decided to hold local governments harmless. The state decided to continue distribution to local governments the revenue from gross receipts tax that would have been collected locally on food and medical. The Town of Silver City, along with all the other municipalities in the State relied on the Legislature to continue with this plan, and so budgeting by these local governments was done accordingly.

GǣBut in 2013, the State enacted legislation phasing out, over a 15-year period, the hold harmless distribution reimbursement to towns with a population over 10,000 (Silver CityG