Los Alamos Council adopts FY2026 budget, directs staff to pursue half-cent GRT and housing fund plan

Los Alamos County Council adopted the fiscal year 2026 budget and gave staff direction to pursue a gross receipts tax increase to shore up long‑term finances and help create an affordable housing funding source.

The council voted 6–1 to direct county staff to return no later than Oct. 31, 2025 with the necessary steps to move forward on a half‑cent GRT increase, to be effective July 1, 2026 if enacted. Councilors approved the FY2026 budget in the amount stated in the materials presented during the meeting; the adopted total reported during the meeting was $367,980,440. Councilor Reger cast the lone no vote on both the GRT direction and the final budget adoption.

Council and staff said the long‑range financial model shows the county’s baseline gross receipts tax revenue has declined from recent peaks and that, without an incremental tax change, reserves could fall below the county’s policy target in the later years of the 10‑year projection. Finance staff presented four scenarios: the baseline with the proposed quarter‑cent GRT, a scenario with no GRT increase, a scenario with no budget options and no GRT increase, and a half‑cent scenario that would add capacity for transfers and preserve target reserves. Staff told the council a quarter‑cent increment at current revenue levels was estimated to generate about $7.2 million in the first year; a half‑cent would roughly double that amount.

Economic development and housing staff described how a dedicated incremental GRT could be used. "We could stockpile the cash and use it for purchases of deed restrictions like we recently did with the Ninth Scribe Apartments," a county staff member said during the presentation, adding that the fund also could be used to backstop bond financing for larger projects so developers could secure debt at better terms. Staff cautioned council that any designation of funds to a housing program would likely require a separate ordinance or agreement and that pledged funds become encumbered when the county enters contractual commitments.

Councilors debated timing, size and purpose of an increment and reiterated that the council would not be enacting an increase immediately; instead the direction was to return with ordinance language and final projections in the fall. Several councilors pressed for a funding vehicle that could support a range of housing tools, including deed restriction buy‑downs, down‑payment or developer incentives and accessory dwelling‑unit (ADU) programs.

County finance staff also noted modeling uncertainty: GRT receipts are volatile and current monthly statements lag activity by two months. Staff emphasized the proposed GRT increments were included in the long‑range plan to maintain operations and reserves in the face of a lower new baseline.

Votes at a glance: The meeting recorded multiple binding council actions tied to the budget discussion.

• Motion to direct county staff to return no later than Oct. 31, 2025 with a proposal to enact a half‑cent gross receipts tax increase effective July 1, 2026 (motion by Councilor Reedy; second by Councilor Hammond). Vote: 6 in favor, 1 opposed (Councilor Reger). Outcome: approved.

• Motion to adopt the FY2026 budget and related schedules as presented (motion by Councilor Reedy; second by Councilor Hand). Vote: 6 in favor, 1 opposed (Councilor Reger). Outcome: approved.

The council requested that staff return in the fall with updated revenue data and ordinance language so the council could consider enactment with more current information. Staff said the earliest practical enactment window for a fiscal‑year GRT change is to have final ordinance action before the fall so it can take effect July 1, 2026.

The council recessed to allow staff to build final budget documents based on the direction given and scheduled follow‑up in October.