Subsidy Plan Could Force Local Taxes To Be Raised

Mar 25, 2013

The New Mexico Legislature's decision to phase out state reimbursements to local governments for not taxing food and medicine could lead some city and county governments to raise taxes.

The plan adopted by the Legislature on March 16 will require large and mid-sized city and county governments to accept a payout between 6 percent and 7 percent smaller each year starting in 2016 until the state's "hold harmless" subsidies for the food and medicine taxes are entirely eliminated by 2030.

The Albuquerque Journal reports some local governments say that tax hike may be needed.

Local government officials say the lost state money adds new financial pressure to local budgets already strained by earlier cuts needed to weather years of economic recession.