On Saturday, at 11 a.m., the City of Carlsbad learned that Governor Michelle Lujan Grisham vetoed Senate Bill 292, which would have appropriated 25 million dollars to the City of Carlsbad. This bill received unanimous support in the House and Senate, as Senator Gay Kernan and others did an exceptional job of explaining the need. The Governor also vetoed a similar bill that would have supported Hobbs.
In 2019, House Bill 6 changed the state’s tax code to a model that charges a tax for where a service takes place, not where the business that provides the service is located. This had a varied impact on different communities, based on what kind of services are provided there.
Communities with lots of oil and gas industry, such as Carlsbad and Hobbs, took the hardest hit by far. These communities have many offices inside of city limits who provide services that are largely outside of city limits. The City of Carlsbad’s projected income has declined by about 30 percent because of this change, with tax revenues instead going to the county and state.
However, the need for city services has not declined during this period. In fact, a continued growing population means we have a greater need than ever for infrastructure and staffing.
For the past few years, our legislators have sought to introduce bills that would address this situation, both by providing temporary and permanent solutions. SB 292 would have allowed us to address immediate issues caused by this shortfall.
Of course, we’re extremely disappointed that this bill was vetoed. These funds would have been used for filling key local positions and repairing local infrastructure.
In her veto, the Governor said it is too soon to accurately gauge how Carlsbad’s revenues will change. Furthermore, she argued that it would be unfair to give Carlsbad funds when many other cities in the state would also benefit from an additional infusion of funds.
The Governor has promised to work with us on a full time solution, which we of course need to do, but this year’s bill would have allowed us to address immediate needs. We’d thought that the bill’s unanimous support in the House and Senate showed that the situation in Carlsbad and Hobbs was unique and deserved immediate attention. It certainly seems fair that the communities in which the industry responsible for paying for much of the state’s bills are located receive enough funding to handle basic infrastructure needs.
At this point, all we can do is continue to work with our legislators and the Governor’s office on developing both temporary and long-term solutions.
Unfortunately, this veto very likely will have a significant impact on the City of Carlsbad and its budget. We will be working closely with City Council and City Administration to adjust our budget as required. Our goal will, as always, be to provide services to our residents to the best of our ability.
Sincerely,
Carlsbad Mayor Dale Janway