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Home / Articles / News / Opinion /  The $80 Million Dollar Question
Jack-Sullivan-l

The $80 Million Dollar Question

What you should know about the transit tax

October 14, 2008, 12:00 am
By

By Jack Sullivan

A gross receipts transit tax proposition will appear on the Nov. 4 ballot in Santa Fe County that will cost taxpayers over $80 million.

It is not a vote for or against the Rail Runner or any existing transit programs. It is a vote about who should pay the operation and maintenance costs of a state transportation project, and the best way to pay for and manage expanded local surface transit programs.

This tax has nothing to do with the Park and Ride program, which serves Albuquerque, Santa Fe, Las Vegas, Española and Los Alamos. Park and Ride is a New Mexico Department of Transportation program.

A gross receipts (sales) tax is a regressive tax and a particularly poor way to fund transit programs, although this is not disclosed in the ballot question. It hurts most those who are least able to pay, including seniors and persons on fixed incomes. Unfortunately, the Santa Fe County Commission has no authority over this tax, which is being imposed by the North Central Regional Transit District (NCTRD).

Half of the tax would go to support the operation of the Rail Runner. The Rail Runner is a state commuter rail project that benefits all New Mexicans and, as such, should be operated and maintained by the state, just as other transportation projects are.

Local gross receipts taxes are needed for local county services. This tax sets an extremely bad precedent. The state has unilaterally authorized a major project and now, through the NCRTD, it wants to impose the operation and maintenance costs on others. In other words, we are supposed to raise and care for the baby, even though we weren’t there at conception.

In October 2007, Gov. Bill Richardson issued a press release and the secretary of the New Mexico Department of Transportation (NMDOT) told the Metropolitan Planning Organization that the state would fund the operation of the Rail Runner. MPO approval was needed for the Rail Runner before the federal government would sign off on the project. With this assurance, the MPO approved the Rail Runner extension to Santa Fe and the I-25 alignment.

The administration and secretary then changed their tune and went to the state Legislature in early 2008 with a bill that would have mandated the creation of a four-county transit district, funded by local gross receipts taxes, to pay for the operation of the Rail Runner. The bill died in the Senate. NMDOT then turned to the NCRTD, which they fund through two major federal transit programs, and encouraged them to mandate a tax on the counties in their district. This constitutes one half of the tax bite voters now face.

The other half of the $80 million in taxes over 15 years would be split 86 percent to Santa Fe County and 14 percent to the NCRTD. This concession by NCRTD only came about after the county withdrew from the NCRTD. Having the NCRTD administer any part of Santa Fe County’s transit program raises several red flags: The NCRTD’s cost per rider per one-way trip for fiscal year 2007 was $42.80, versus a statewide average of $9.77. This ranks them last out of 23 other rural public-transit providers in New Mexico. The NCRTD’s administrative budget is 109 percent of its operations budget. This means they spend more than 100 percent of their operating costs on administrative costs.

The NCRTD has not implemented Santa Fe County’s prioritized routes in the Community College District and the Route 14 area, and has provided no transit assistance to the city of Santa Fe. It has spent almost $2 million in federal funds to subsidize uneconomical rural routes and free casino shuttles. It doesn’t even collect fares, saying it’s not worth the trouble. Complaints regarding the one and only NCRTD route in Santa Fe County have been numerous and unresolved. Scheduling, advertising and communication have been poor. This has been documented in testimony to the County Commission by the city’s Transit Advisory Board.

Despite its name, the NCRTD is a rural, not regional transit district. Its service plan is based on a political wish list, not on demonstrated demand.

In addition, the NCRTD does not have a voting structure that is proportionate to population. The city and county only have 10 of 28 votes on the board, yet they represent more than 60 percent of the population. Without a one-person, one-vote structure, the NCRTD will retain its rural bias and may impose future gross receipts taxes, up to a total of 0.5 percent, to subsidize its operations without Santa Fe County’s approval.

This is taxation without representation.

Do we need the NCRTD with its high overhead costs acting as a middle man to manage a county transit program?

If the tax is rejected, the state will be sent a strong message that county taxpayers are not in a position to bail out the state and maintain its capital projects in perpetuity, and that government must honor the promises it makes.

In addition, city and county elected officials will be given clear direction to complete the already started formation of a city/county transit district. A locally administered transit district will be far more economical and responsive to riders’ needs.

Constituents and taxpayers expect their elected officials to effectively manage their tax dollars. More revenue would come to Santa Fe County with a local 0.0625 percent gross receipts tax than would come to the county with the currently proposed 0.25 percent tax managed by the NCRTD.

This transit tax is a poor investment of more than $80 million and should not be supported.

 

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