Documents obtained by the Guadalupe County Communicator indicate a private prison operator is the likely source of the gross receipts tax rebate that has put the City of Santa Rosa, N.M., in a fiscal crisis.
The GEO Group is the only local employer given a tax refund this year that’s big enough to cover what Santa Rosa and Guadalupe County owe, the newspaper said in this week’s print edition.
GEO’s corporate offices in Florida did not respond to questions from The Communicator. The newspaper said officials at the GEO-run Guadalupe County Correctional Facility weren’t aware of the tax-refund situation involving their parent company.
The city owes about about $1.21 million, and the county owes $423,000. The fiscal crisis, which erupted in late June, will hamper Santa Rosa’s efforts to renovate the historic Ilfeld Warehouse and open a Route 66 museum there.
State officials have kept secret the identity of the party that appealed those taxes. However, records show only five taxpayers in the state of New Mexico received a refund of $1.6 million or more in the past six months. And GEO is the only one operating in Santa Rosa.
GEO also was given tax refunds from Hobbs and Clayton. The total rebate was more than $2.7 million.
Meanwhile, Santa Rosa officials were preparing for deep budget cuts. The Communicator provided the grim details:
City officials say there’s still a chance that negotiations will help them avoid a catastrophic $1.2 million tax refund payback this year. However, even in the most optimistic scenario, the city soon must cut about 13 percent of its general fund expenditures to make up for the loss of future revenues from the taxpayer, The Communicator has learned. […]
Even if the city did not have to pay a dime toward the $1.2 million refund, its general fund still faces a projected loss of $320,000 in annual revenue on an ongoing basis. The alone will require the city to cut its planned expenditures by around $27,000 each month, prompting some difficult decisions starting at the regular meeting scheduled for 6 p.m. Tuesday at City Hall.
Because of the fiscal crisis, it’s hard to see how Santa Rosa will be able to open a Route 66 museum for at least the next two years. Just a few months ago, the state awarded a $325,000 grant to rehab the town’s historic Ilfeld Warehouse. With the city becoming cash-strapped, it’s doubtful it can pay for all the warehouse’s necessary renovations and the costs of running a museum.
Sixty miles east, Tucumcari also seeks to land a Route 66 museum. Recently, Tucumcari’s New Mexico Route 66 Museum was incorporated as an official entity, and the state approved the museum group’s nonprofit status. An announcement for a proposed museum site is expected by fall.
I’m confused – how does a prison get charged gross receipts tax? What were they selling?
Probably your typical prison industries. Here’s a list of what the New Mexico prison system sells: https://www.corrections.state.nm.us/industries/intro.html
If it’s a private prison, not a government entity, then they should be PAYING taxes; not getting rebates. When will we get corporations off welfare?
Thanks Ron – wasn’t clicking there for a minute!lol Back in the day it was just chain gangs growing crops, making license plates and the occasional prison rodeo. I forgot today they have factories and build all kinds of stuff. Someone must have either made a mistake and over collected, or worse yet charged the wrong %tax rate.
Our tax rates change frequently enough, that personnel like the city, has to keep a watchful eye out for them. If someone were producing and selling millions worth of product, the tax rate changed by just 1 or 2%, and someone didn’t catch it within 6 months, that would possibly be enough right there.
I remember a while back our tax rate changed, luckily it was on the news, otherwise no one gave us official notice, or we would have been out some revenue. The other way around, if it had gone down and not been caught, we would have been responsible for over charging and had to make the appropriate refunds.
With this information now, I’d backtrack and see if there were any tax rate changes over the last few years for either Santa Rosa or Guadalupe County? New Mexico is a little weird, state gross receipts tax vary by community and are not standard across the board. Especially in smaller communities, where the state plays a larger roll in subsidies or financial assistance.
To be fair, tax rates vary widely in Oklahoma, where I live, because cities have the ability to have their own sales tax rates, on top on the state rate.