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City Council votes down gross receipts tax increase (again)

Ordinance would have raised GRT by 0.4875% to fund district projects and city operations

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For the second time in four months, a proposal to raise gross receipts taxes failed to advance at the Albuquerque City Council.

The proposed 0.4875% increase, dubbed the Community Enhancement and Local Investment Tax, would have generated about $113 million annually. The revenue would have been split between community projects 鈥 divided equally among council districts 鈥 and city operations, including cost-of-living increases.

Councilors voted down the proposal 5-4, preventing it from going before voters in November.

Councilors Dan Champine, Tammy Fiebelkorn, Ren茅e Grout, Dan Lewis and Stephanie Telles voted against the measure. Councilors Brook Bassan, Klarissa Pe帽a, Nichole Rogers and Joaqu铆n Baca voted in favor.

Sponsored by Bassan and Pe帽a, the ordinance would have raised Albuquerque鈥檚 gross receipts tax rate from 7.625% to 8.1%. A similar proposal failed in March. That measure was sponsored by Baca and Bassan, who ultimately voted against it.

Gross receipts taxes are paid by businesses and passed on to consumers. The tax makes up a significant share of the city鈥檚 operating budget and general fund. In 2025, 40% of the city鈥檚 revenue came from gross receipts taxes.

Among New Mexico鈥檚 five most populous cities and towns, Albuquerque has the second-lowest gross receipts tax rate at 7.625%. Neighboring Rio Rancho鈥檚 rate is 0.1875 percentage points lower. New Mexico is one of a minority of states that levy a gross receipts tax.

Under the proposal, half of the new revenue would have gone toward general municipal operations, maintenance and cost-of-living increases. The remaining 50% would have funded community enhancement projects, with the money divided among the city鈥檚 nine council districts and the Mayor鈥檚 Office.

Most public commenters during Monday鈥檚 meeting opposed the proposal, citing concerns that higher taxes would increase costs for consumers already struggling with inflation, particularly low-income residents and those on fixed incomes.

鈥淚t鈥檚 already been defeated once, we don鈥檛 want it on the ballot,鈥 resident Dennis Curtis said. He added that the city should 鈥渂udget responsibly and lower taxes so we can make Albuquerque more prosperous.鈥

Several opponents pointed to the North Domingo Baca Park Aquatics Center as an example of a project that would benefit from the tax increase despite its costs rising substantially since it was approved.

Bassan, who championed the project, pushed back on that criticism.

鈥淭he proposal splits 50% of the revenues from the GRT increase 10 ways,鈥 she said, 鈥渘ot just for one district or one project.鈥

Bassan also said the aquatics center was not 鈥渁 mismanaged project鈥 and argued that much of the increase in costs resulted from inflation between the project鈥檚 approval and construction.

Lewis said he would vote against the tax increase because of the views of his constituents.

鈥淚 have constituents that have elected me four times and they know how strongly I feel,鈥 he said. 鈥淭hey feel strongly about decisions like this and I feel like I owe it to them 鈥 the people in this city who want to see the cost of living in the city go down.鈥

Grout said she was conflicted about the proposal and questioned whether there were other ways to increase city revenue. She said the current budget 鈥渟hould be enough to run the city.鈥

鈥淲e need to live within our means 鈥 with the budget we are given. I have to do that at home,鈥 Grout said.

She also cited rising costs for residents, including property taxes, solid waste fees and vehicle registration costs.

鈥淚t鈥檚 not fair to continually ask people for more and more,鈥 she said. 鈥淚 don鈥檛 think this is the right time.鈥

Pe帽a called it 鈥渃ourageous鈥 for Bassan to bring the proposal back and said it had 鈥渘othing to do with the pool.鈥 She questioned why residents should not invest more in city services and employees.

鈥淭he citizens are the employers of our employees and I think it鈥檚 time we help our own employees have a better quality of life themselves,鈥 Pe帽a said.

Pe帽a added that the proposal could fund significant projects in her District 3, which she said has received less attention and economic opportunity than other parts of the city.

鈥淎s a city we are struggling. I think we need to grow and if we do nothing, we have the same thing,鈥 she said. 鈥淚f we try to do something different, and build 10, 15 amazing projects in each of our districts, I think that really changes the trajectory for our city.鈥