Commissioner Sullivan Speaks Out About Transit Tax

WHAT YOU NEED TO KNOW ABOUT THE $80,000,000 TRANSIT TAX

Jack Sullivan
Santa Fe County Commissioner


A gross receipts transit tax proposition will appear on the November 4th ballot in Santa Fe County which will cost taxpayers over $80,000,000. It is not a vote for or against the Railrunner or any existing transit programs. It is a vote about who should pay the operation and maintenance costs of a state transportation project, and the best way to pay for and manage expanded local surface transit programs.

This tax has nothing to do with the Park and Ride program which serves Albuquerque, Santa Fe, Las Vegas, Espanola and Los Alamos. Park and Ride is a New Mexico Department of Transportation program.

A gross receipts (sales) tax is a regressive tax, and a particularly poor way to fund transit programs. It hurts most those who are least able to pay, including seniors and persons on fixed incomes. Unfortunately, the Santa Fe County Commission has no authority over this tax which is being imposed by the North Central Regional Transit District (NCTRD).

Half of the tax would go to support the operation of the Railrunner, although that is not disclosed in the ballot question. The Railrunner is a state commuter rail project which benefits all New Mexicans and, as such, should be operated and maintained by the state, just as other transportation projects are.

The state and the Mid Region Council of Governments say that the money is needed from Santa Fe County taxpayers because federal funds will dry up in 2009. The only funds that will dry up are those that have been expended in the original federal grant for the Belen to Bernalillo route. Close to $4 million a year in federal funding remains available after that once the Santa Fe extension is completed.

Local gross receipts taxes are needed for local County services. This tax sets an extremely bad precedent. The state has unilaterally authorized a major project, and now, through the NCRTD, wants to impose the operation and maintenance costs on others. In other words, we are supposed to raise and care for the baby, even though we weren’t there at conception.

In October 2007 the Governor issued a press release and the Secretary of the NM Department of Transportation told the Metropolitan Planning Organization that the state would fund the operation of the Railrunner. MPO approval was needed for the Railrunner before the federal government would sign off on the project. With this assurance, the MPO approved the Railrunner extension to Santa Fe and the I-25 alignment.

The Administration and Secretary then changed their tune and went to the State Legislature in early 2008 with a bill which would have mandated the creation of a 4-county transit district, funded by local gross receipts taxes, to pay for the operation of the Railrunner. The bill died in the Senate. NMDOT then turned to the NCRTD, which they fund through two major federal transit programs, and encouraged them to mandate a tax on the counties in their district. This constitutes one half of the tax bite voters now face.

The other half of the $80,000,000 in taxes over 15 years would be split 86% to Santa Fe County and 14% to the NCRTD, although there is no agreement currently in place confirming this. This potential concession by NCRTD only came about after the county withdrew from the NCRTD. Having the NCRTD administer any part of Santa Fe County’s transit program raises several red flags:

The NCRTD’s cost per rider per one-way trip for FY 2007 was $42.80, vs. a statewide average of $9.77. This ranks them last out of 23 other rural public transit providers in New Mexico. The NCRTD’s administrative budget is 109% of its operations budget. This means they spend more than 100% of their operating costs on administrative costs.

The NCRTD has not implemented Santa Fe County’s prioritized routes in the Community College District and the Route 14 area, and has provided no transit assistance to the City of Santa Fe. It has spent almost $2,000,000 in federal funds subsidizing uneconomical rural routes and free casino shuttles. It doesn’t even collect fares, saying it’s not worth the trouble. Complaints regarding the one and only NCRTD route in Santa Fe County have been numerous and unresolved. Scheduling, advertising and communication have been poor. This has been documented in testimony to the County Commission by the City’s Transit Advisory Board.

Despite its name, the NCRTD is a rural, not a regional transit district. Its service plan is based on a political wish list, not on demonstrated demand.

In addition, the NCRTD does not have a voting structure that is proportionate to population. The City and County only have 10 of 28 votes on the Board, yet they represent over 60% of the population. Without a one person one vote structure, the NCRTD will retain its rural bias, and may impose future gross receipts taxes, up to a total of ½%, to subsidize its operations without Santa Fe County’s approval.

This is taxation without representation.

Do we need the NCRTD with its high overhead costs acting as a middle man to manage a county transit program?

If the tax is rejected, the state will be sent a strong message that county taxpayers are not in a position to bail out the state and maintain its capital projects in perpetuity, and that government must honor the promises it makes.

In addition, city and county elected officials will be given clear direction to complete the already started formation of a city/county transit district. A locally-administered transit district will be far more economical and responsive to riders’ needs.

Constituents and taxpayers expect their elected officials to effectively manage their tax dollars. More revenue would come to Santa Fe County with a local 1/16% gross receipts tax than would come to the county with the currently proposed 1/8% tax managed by the NCRTD.

This transit tax is a poor investment of more than $80,000,000, and should not be supported.