Plea for Cash

Santa Fe mayor wants legislators to help fill budget gaps

As Santa Fe city departments struggle to cut $100 million from next year's budget before the July 1 deadline, Mayor Alan Webber plans to turn to the state Legislature for help.

At a weekly news conference Monday, Webber outlined five measures he hopes will be considered in a special session this week that funnel money to Santa Fe and other small cities to help close budget gaps.

"At the moment we are not seeing any help in any substantial way coming from Washington DC," Webber told reporters, explaining that the city has been lobbying Congress for federal aid for cities with populations under 500,000 that have so far been excluded from direct assistance. While the House of Representatives passed a bill that would send cash to smaller cities, the measure is stalled in the Senate.

"Our next source of help is the state," Webber said. "It's clear that the state has its own financial issues it has to deal with largely based on oil prices plummeting again as a result of COVID-19, but they also have resources they can help us with, and they have the ability to help cities in every part of New Mexico."

Webber says Gov. Michelle Lujan Grisham called him to express her desire to help Santa Fe deal with its unprecedented budget shortfall, but did not say which, if any, of these measures she plans to support.

1. First, expedite the transfer of internet sales tax to cities.

During the 2019 session, the Legislature passed a bill requiring online retailers with more than $100,000 annual in sales in New Mexico to register with the New Mexico Department of Taxation and Revenue and pay gross receipts taxes, even if their physical location is located out of state.

The state is scheduled to begin distributing the GRT collected from internet sales to counties and municipalities in July 2021.

"We are asking for those payments to start right away," said Webber adding that during the shutdown, many Santa Fe residents turned to the internet to buy things they would have otherwise bought locally. "If we were able to get a piece of that internet sales tax now it would make up for the money that was lost because we were unable to get gross receipts tax as those transactions migrated from our local stores to the internet.

2. City officials also want the state to allow the city to refinance some of its debts to free up cash the city could put towards continuing services for residents.

3. Next, Santa Fe wants New Mexico to make funds allocated for state public safety and fire departments available to municipalities to offset their police and fire costs.

In recent months Webber has said he plans to continue fully funding city and police departments because of their critical role as part of the city's response to COVID-19.

On Monday Webber did not offer a direct response to a question from SFR about whether his position on public safety funding has changed in light of recent protests over police violence and calls to de-fund the police department. However, he did say that all departments including public safety will take significant cuts to close the $100 million gap in the city budget.

4. The city will also ask for a portion of federal CARES act funding distributed to the state.

New Mexico received $25 billion in federal aid from the CARES act. Lawmakers will likely distribute $165 million to local governments during the special session.

5. Finally, the city will ask the Legislature to use money from one of the state permanent funds to create a municipal emergency loan fund.

Several state representatives have been working on a bill that would take around $500 million from the state's Severance Tax Permanent Fund to create a loan program for small businesses that have been hit hard by the pandemic. Webber says he will ask for a municipal loan program as an addition to this piece of legislation.

"The relationship between our small businesses and city government is very much hand and hand," the mayor said.

"If there's money loaned to small businesses but cities are facing drastic draconian cuts to their workforce, the people who would shop at those small businesses no longer have the paycheck to go buy something from the local stores," Webber continued, "If we provide jobs for our employees and fund their salaries but we don't help the mom and pop stores stay in business, that money will leave our community."

The special session will officially convene on Thursday this week, and is expected to last no more than a few days.

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