Ignacio needs to bring in more revenue to cover town expenses, Interim Town Manager Mark Garcia told town trustees on Jan. 20.
"We need to think about our capital improvement needs," he said. "Sooner than not, we need to look at additional revenue. We really have challenges revenue-wise."
Additional revenue would be from raising either the town sales tax or property tax rate. Either one would need voter approval. A tax increase question could be on the April town board election ballot or the November general election ballot, Garcia said. However, it was determined this week that the number of town board candidates equals the number of open seats, unless someone files to run as a write-in candidate, so there might not be a municipal election in April.
Board member Dixie Melton said voter approval will need buy-in from town businesses and residents, and a volunteer group to promote the tax increase. "I'm not real into putting it on the ballot and see what happens" without that help, she said. Voters will want to know what the money will be used for, she added.
Trustee Tom Atencio favored a sales tax increase and said it would have a better chance of passing. "Property tax, there are too many out-of-town owners. They can't vote on it, but they'll make sure their renters vote against it. My parents would vote more for a sales tax than a property tax. The sales tax comes out of everybody," not just property owners.
Trustees didn't take any action on which type of tax increase to ask for, if either. Garcia said he wants to have this as part of a strategic visioning session with the board. He suggested preparing a capital improvement plan to show voters.
"The land use code needs substantial work," he said. The cost of incentives to attract businesses could be part of it, as well as the local match for a downtown improvement grant to create branding for the town.
Town voters have rejected property tax increases at least a couple of times in the past 10 years. Property tax is a tiny share of town revenue. The largest revenue sources are town sales taxes and a share of county sales tax.