Construction was the third highest percentage of gross receipt tax revenue for the city in fiscal 2020-2022. This house is near the intersection of 20th Avenue SE and 15th Street SE in Rio Rancho. (Gregory Hasman/Observer)
The City of Rio Rancho’s gross receipts tax revenue declined by almost $1 million in March.
The general fund received about $4.28 million in March. This is down about 18%, or $930,000, from February, at $5.21 million.
Rio Rancho Councilor Paul Wymer said he is not concerned, yet.
“If we start seeing a trend, I would have to rethink that through,” he said. “I’ll let it play out and see if things improve or things settle down.”
Revenues for March are usually lower than February, which takes into account holiday shopping, City Director of Financial Services Carole Jaramillo wrote in a memo to the governing body.
Despite the large drop in revenues for March, the $4.28 million is still about $1.02 million, or 31%, higher than the $3.26 million the city projected to receive in March in its revised fiscal year 2021-22 budget, according to the city.
“We’re going to see these fluctuations throughout the year depending on the spending patterns of citizens,” Mayor Gregg Hull said. “Right now, I’m very pleased where revenues are. We’re trending above projections. We’re just going to kind-of see where it takes us through the end of the year.”
If there is any positive to have come out of COVID-19 and the restrictions that were put into place, it’s that people’s shopping tendencies have changed, Wymer said. More are shopping locally and online. The latter is helping the city’s internet gross receipts tax revenues.
“In general, who would have guessed two years ago we would see a positive outcome based on what we first initially thought we saw with the COVID lockdowns, restrictions and people losing their jobs,” he said. “It’s quite the anomaly. Something I would never have guessed we would see.”
The gross receipts tax revenue is about $6.1 million above year-to-date revised estimates. The city attributes this in part to a surge in construction activity. Construction has brought in the third highest percentage of GRT revenue (19.4%) so far in 2021-22, about $7.33 million.
“I am cautiously optimistic that it will continue,” Wymer said, but if interest rates continue to go up then the city will likely see things slow down. “How big of a slowdown, time will tell.”
While no one can predict the future of the industry, Hull said, “we’re better prepared to meet the future today than 2008 when we experienced the construction industry crash.”
Attempts were made to reach councilors Jim Owen, Jeremy Lenentine, Bob Tyler, Karissa Culbreath and Daniel Stoddard for comments, but they did not respond as of press time.