City economist: state ‘‘hold harmless’’ error inflated July GRT; true growth about 4.5%
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Summary
City Economist Christine Burner told the Albuquerque City Council that an administrative error at the State Taxation and Revenue Department temporarily inflated July gross receipts tax growth to 13.7%, and that the underlying July growth was about 4.5% after the correction.
City Economist Christine Burner presented the city’s July gross receipts tax (GRT) report and told the Albuquerque City Council that a State Tax Department administrative error briefly inflated the month’s reported growth. "They freely admitted this," Burner said of the department, which mistakenly posted a negative correction one month and a double payment the next.
Burner said the left-most column on the city’s monthly GRT table shows the month-to-month change for July, and the figure reported in the city’s packet reflected the unusual state payment. ‘‘If we account for that extra hold harmless, it looks like our growth rate was about 4 and a half percent,’’ Burner said. The packet also notes that retail accounts for roughly 26% of GRT and construction about 12%.
Why this matters: GRT feeds Albuquerque’s general fund and is a primary revenue stream for city services. Councilors asked whether the GRT figures or the hold-harmless correction change the city’s overall fiscal position.
Councilor Lewis pressed Burner on construction-sector trends and whether year-over-year building permit activity supported the GRT numbers. Burner said building permits and permit revenue were lower in fiscal 2025 than fiscal 2024 and offered to provide a fuller year-over-year analysis to the council. Councilor Rogers asked whether the city can know its general-fund balance at any moment; Burner said the city does not yet have audited ending revenue for FY25 and could not give a final answer.
The report also called out the state-shared excise tax on cannabis. Burner said cannabis excise revenue declined 16.4% in FY2025 versus FY2024 and fell 14.4% for the July comparison cited in the packet; she said she will follow up with the Taxation and Revenue Department on compliance efforts.
Councilors asked about next steps. Burner pointed to continuing monitoring and said the city will provide additional detail if councilors want a twelve-month comparison or the five-year averages. ‘‘The expected growth for this month is 3.8%... it looks like the growth was about 4 and a half percent, which is still pretty good for the beginning of the fiscal year,’’ Burner said.
