City councilors voted Monday, Aug. 17 to put a proposed gross receipts tax (GRT) increase on the ballot for Roswell residents in the Nov. 3 General Election.
Following public comment at Monday’s special meeting, councilors passed the resolution on a 7-1 vote, meaning the question will appear on the ballot.
The local option gross receipts tax increase is permissible under the Local Economic Development Act (LEDA) and would entail a 10-year, 0.25% hike. LEDA allows local jurisdictions and municipalities to increase GRTs for their constituents and collect that portion for local use, in addition to that which goes to the state.
If approved, the new tax would raise the city’s current 8.27% GRT rate to 8.52%. Based on fiscal year 2026 revenues, the city estimates that the tax would generate an additional $4.5 million annually.
Councilors also voted 7-1 to advertise a public hearing at next month’s regular meeting for an ordinance to enshrine the tax in city code if voters approve it.
The tax would expire in 2037 unless renewed by voters.
Gross receipts taxes function similar to sales tax, paid by businesses as a percentage of their total revenue. It is common for businesses to pass the added expense on to customers, according to a report by the New Mexico Taxation and Revenue Department.
Ward 1 City Councilor Christina Arnold voted against both items and argued the new tax would strain the personal budgets of her constituents.
“For my constituents, it’s going to hurt,” Arnold said. She said she supports LEDA funding but believes the money should come from the city’s general fund rather than a new tax.
Voting for both measures were Councilors Juan Oropesa of Ward 1; Juliana Halverson and Riley Armstrong of Ward 2; Kurt Gass of Ward 3; Robert Corn and Darrell Johnson of Ward 4; and Carlos Marrujo of Ward 5.
Under LEDA, a state law aimed at encouraging economic development, municipalities may impose a local-option GRT of up to 0.25% with voter approval, while counties may impose up to one-eighth of 1%.
Chaves County commissioners were scheduled to vote on such an increase for county residents Thursday at their regular schedule meeting, 9 a.m. at the Chaves County Administrative Center, following a special meeting Wednesday to gather public comments.
State law specifies that local governments can put revenue from the tax into a fund dedicated to economic development. The money could be used for public works improvements needed to attract a business, as well as grants, loans and technical assistance.
Eight people spoke on the city’s proposal at Monday’s meeting, six of them in opposition. Debi Lee, regional economic coordinator with the Southeast New Mexico Economic Development District, said similar taxes have helped Portales and other cities attract business.
“The purpose of this tax is to generate economic activity,” she said. “It creates your quality of life, it creates jobs … which is what you all need.”
Kerry Moore of Roswell said the city should disclose how much LEDA funding is needed, what projects are ready to move forward, what jobs would be created and why the general fund can’t cover the cost — before asking voters for more.
“Another tax increase should be a last option, not the first,” Moore said.
The request comes as residents have faced two recent GRT increases — one for the ambulance service, one for flood recovery — plus sharply rising water rates.
Richard McKinley, a self-described lifelong Roswell resident, said another tax would push Roswell’s GRT nearly as high as those in Albuquerque and Santa Fe, despite the city’s smaller, more rural character. He suggested the city wait for other local-option GRT increases to expire before adding a new one.
Vivian Moore, 39, of Roswell, said the tax would hit tourists and fixed-income residents from nearby communities, as well as Roswell taxpayers. She said she and other family members are already struggling to pay bills.
“If you raise the taxes for us, none of my family is going to make it,” she said.
