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Council Chair Approaches UC On GRT Issue

on November 28, 2017 - 8:54am
Los Alamos County Council Chair David Izraelevitz
Los Alamos Daily Post

Los Alamos County Council Chair David Izraelevitz has sent a letter to the University of California Board of Regents (UC) urging them to propose a corporate structure that retains gross receipts tax (GRT) taxability when they bid for the upcoming Los Alamos National Laboratory management and operating contract.

UC announced Nov. 16 that it will bid on the $2.2 million contract, which begins Oct. 1, 2018.

The Nov. 20 letter asks the University to consider the negative consequences of any bid package that promotes a return to a non-taxable status. Izraelevitz said Monday that he will send a similar letter to any other non-taxable entity that announces its intent to bid on the contract.

The County Council and the Regional Coalition of LANL Communities Board (RCLC) are concerned that if a not-for-profit is selected for the contract, the State of New Mexico will lose some $25 million in GRT. RCLC Executive Director Andrea Romero and Santa Fe Mayor Javier Gonzales, chair of the RCLC Board, expressed their concerns to the Revenue Stabilization and Tax Committee Nov. 21 in Santa Fe. Councilor Chris Chandler, who is secretary of the RCLC Board also attended the Committee meeting on the issue, which she said she considers an important one for the community, region and State.

Izraelevitz’s letter states that supporting LANL has always been a goal for Los Alamos County government and that from its beginnings during the Manhattan Project in World War II to presently assisting the Lab, the County has been proud of its partnership.

“LANL is a critical component of our community and we have aligned the majority of our goals, programs and services to address its need. Nearly half of LANL employees live in the County with 70 percent of the research and development staff calling Los Alamos ‘home’”, the letter states. “As the community evolved and LANL’s research mission expanded, the County struggled for decades to maintain basic infrastructure and amenities. Providing funding needs such as modern housing options – important in attracting the best and brightest recruits to the Lab – were challenging.”

The letter states that with the change in the Lab management structure in 2006, the County’s tax base significantly improved as LANS, LLC began paying GRT to the State, which directly benefited the community.

“Having this solid tax base has allowed the County to set and fund priorities designed to serve the Laboratory’s mission and its workforce. With our County primarily encompassing non-taxable federal property, GRT is our most important funding mechanism,” the letter states. It adds that the recent request for proposal leaving the possibility of the contract being awarded to a non-taxable entity, is cause for “grave concern”.

The letter states that before LANS, revenues were nearly 50 percent of today’s levels.

“You can’t have an entity driving 90 percent of the economy yet paying only 50 percent of typical taxes but nevertheless expect a normal level of service,” the letter states. Izraelevitz goes on to describe how GRT funds have been used by the County since 2006 for capital improvements, creation of a consolidated dispatch center, the transit system and more. He also lists entities, which the County helps fund such as the Regional Coalition of LANL Communities, the Regional Economic Development Initiative and Progress Through Partnering.

“Los Alamos faces a period of uncertainty and change. We need to protect and preserve our investment and relationships while enhancing the quality of life of our residents today and tomorrow. Thousands of LANL employees will be retiring within the life expectancy of the next contract, and keeping an attractive and affordable community will be a necessary focus in LANL’s recruiting efforts,” the letter states. “We must keep in mind that young scientists and their families have many choices and options when selecting a future job and community to make a home.”

The letter concludes with Izraelevitz telling UC that the Council welcomes an opportunity to discuss the issues and will provide any financial operating cost data for the County whose “daytime population nearly doubles due to commuters”.