Renewal of Local Liquor Excise Tax Agreement with McKinley County
The City of Gallup and McKinley County have a Joint Powers Agreement which expires in June regarding the process for distributing the Local Liquor Excise Tax. This tax that is separate from the Liquor Excise Tax that is collected and distributed on a state-wide basis. This local option district tax must be re-approved by the voters every three years.
The attached agreement has been approved by the McKinley County Commission. It has a four year term with an expiration date of June 2024. The revenue is expended in the year following the year in which it was collected. For example, revenue collected in FY 20 will be expended in FY 21. FY24 expenditures would be from revenue collected in FY 23, which is the end of the next three year approval period so the contract is now in sync with the three year voter approval cycle.
The process by which the funding is approved is that the LET Task Force, comprised of five city and five county representatives, makes a recommendation to the City Council and County Commission based on the projected revenues for the upcoming fiscal year. Both the City Council and County Commission must approved the recommended distribution. The distribution can be adjusted once the final revenue figures become available from the Taxation and Revenue Department.
There is only one substantive difference from the existing agreement. The existing agreement states that the JPA will terminate if an expenditure approved by the City and the County is deemed by DFA to be not authorized under the state law establishing the Local LET. The current proposal provides that the LET Task Force will come up with a new recommendation on how to expend any distribution that is not approved by DFA.
- Fiscal Impact:
- Approval of the new JPA
- Speaker's Name
- Curtis Hayes