Title
Introduction of Incorporated County of Los Alamos Ordinance No. 725 Adopting a Municipal Gross Receipts Tax of One-Half of One Percent to be Effective January 1, 2024
Recommended Action
I introduce, without prejudice, Incorporated County of Los Alamos Ordinance No. 725 Adopting a Municipal Gross Receipts Tax of one-half of one percent to be effective January 1, 2024.
County Manager's Recommendation
The County Manager recommends that Council introduce this Ordinance.
Body
On April 24, 2023, Council adopted the FY2024 Budget and included in their motion a directive to return to Council with two ordinances implementing a new one-half percent Gross Receipts Tax (GRT) increment for Council consideration: One ordinance going in to effect January 1, 2024; and the other July 1, 2024. Ordinance No. 725, Attachment A, would make the effective date of the new GRT increment January 1, 2024.
As discussed at the April 2023 Budget Hearings, GRT revenues are expected to increase in the next few years. As LANL moves into the manufacturing phase of their increased pit production in a few years, although the LANL budget will remain high, their taxable expenses will reduce and GRT is projected to drop by approximately $15 million dollars annually. As shown on Attachment B General Fund 10-Year Projections, this additional GRT increment revenue is necessary to maintain desired operational service levels, catch up on deferred maintenance issues, and fund capital projects. Without this additional funding, significant reductions to current operational and capital plans would have to be made.
The County's current GRT rates is 7.1875%, and will drop to 7.0625 July 1, 2023 due to a state GRT reduction of one-quarter percent. If Ordinance No. 725 or No. 726 is adopted, the County's GRT rate will be 7.5625%.
Attachment C is a copy of the GRT slides from the budget hearings and includes information about the comparison of the proposed new GRT rate to others in the state as well...
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