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State taking back GRT funds from some local governments
The move has created a ‘full-scale financial crisis’ in Santa Rosa, where officials have raised the specter of the city declaring bankruptcy.
The Guadalupe County Communicator reports that the N.M. Tax and Revenue Department is taking back more than $1.4 million in gross receipts tax funds previously distributed to local governments around the state, creating a “full-scale financial crisis” for the City of Santa Rosa.
Santa Rosa and Guadalupe County learned late last month that they must return at least $554,000 to the state, following an undisclosed corporation’s successful tax appeal. Santa Rosa is to pay $400,000 of that sum, which is expected to grow as the state continues to calculate just what is owed to the company for its past overpayments.
Grants was similarly hit with a $800,000 tax take-back, and the villages of Jemez Springs and Causey have had to return $40,000 and $10,800, respectively, The Communicator reports.
Citing $2 million in wildfire-related emergency requests from other local governments, the state Board of Finance rejected Santa Rosa’s request for an emergency loan. But the Department of Finance and Administration will allow the city to use funds from its “1/12” reserve account to maintain operations while it pays back at least $400,000 in monthly payments.
Even so, the clawback means Santa Rosa will have to cut staff and reduce city services, city officials told the paper. Monthly tax revenues for the city will drop by $10,000 to $17,000 a month, officials estimate. Santa Rosa officials have raised the specter of the city declaring bankruptcy.
The Taxation and Revenue Department is attempting to improve the notification process so local governments receive “some forewarning” about tax appeals that may result in tax take-backs, TRD Chief Financial Officer David Robbins said.
Bryant Furlow is a freelance health care and government journalist based in Albuquerque.
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“The rich get richer and the poor get poorer. The corporation in question probably had better lawyers.”
“The corporations get paid and the regular folk who live here are left holding the bag. It is just more wealth stripping predation hollowing out whole cities and towns. Tax appeals indeed. Given those kind of numbers, can you imagine the gun for hire attorneys? All we have on our side is an over extended AG King. Then, to add insult to injury, municipalities only recourse is to have an “improved notification process” of impending doom. Gag.
AG King, appeal the appeal.”
C’mon guys. Your knee-jerk partisan reaction to the word “corporation” betrays and undermines your otherwise often intelligent commentary. You clearly don’t know how this works. Taxpayers file refund claims all the time. The tax & rev department does their best to deny them, regardless of merit. So, they were almost certainly legitimate overpayments. If you overpay your taxes, your’re entitled to a refund. I’ll bet every commentor here files for federal and state refunds and fully expects to receive them.
The problem here is that it impacted a local government hugely and unecessarily. They were overpaid and clawed back, albeit inappropriately. It happens all the time and there is law that controls. However. through misapplication of law, insensitivity, and ineptitude on the part of tax & rev, we end up where we are. It shouldn’t have gone down this way and everyone loses. Lets hope they come to their senses and fix it.
So who are we talking about?
The corporations get paid and the regular folk who live here are left holding the bag. It is just more wealth stripping predation hollowing out whole cities and towns. Tax appeals indeed. Given those kind of numbers, can you imagine the gun for hire attorneys? All we have on our side is an over extended AG King. Then, to add insult to injury, municipalities only recourse is to have an “improved notification process” of impending doom. Gag.
AG King, appeal the appeal.
Clawback
1. Money or benefits that are distributed and then taken back as a result of special circumstances.
http://www.investopedia.com/terms/c/clawback.asp
This is the State demanding a do-over. I first heard the term Clawback in late 2008. It is a new term. It is generally referenced when a public-private partnership collapses and the State wants their money back.
https://sites.google.com/site/erikhawkes/Home/how-ppps-really-work
This is also theft. Once money or benefits are distributed to another individual or entity, the giver cannot confiscate those assets unless ordered to do so by a court of law. This is the new era of American Fascism. The State as a predator with Claws.
The rich get richer and the poor get poorer. The corporation in question probably had better lawyers.