City proposes $589.5 million budget for 2025

During a Las Cruces City Council work session that doubled as a public hearing on Monday, City staff presented a proposed Fiscal Year 2025 budget of $589.5 million – a decrease of 3.9% from the 2024 revised budget of $613.2 million.

However, the City's general fund, which is used to fund departments such as police, fire, public works, economic development and libraries, increased by 9.8% ($14.9 million) from $151.8 million in FY24 to $166.7 million in FY25.

The largest portion of general fund revenues (76%) come from gross receipts tax, which the city projects to be $111 million in FY25. The largest expenditure from the general fund goes to personnel (66%), which the city projects to be $110 million in FY25, followed by operating costs ($53 million).

More: Las Cruces city budget: 3 takeaways from budget retreat

The City has budgeted to add 13 new positions, including a licensed clinical social worker with the fire department, a park maintenance worker and three park rangers under the police department.

The City's budget cycle is from July 1, 2024, to June 31, 2025. Council will consider the budget for adoption in May.

City considers tapping into Telshor Fund to complete projects

Various department heads made pitches during the work session regarding projects that could utilize monies from the Telshor Fund.

The Telshor Fund was created in 2004 from the long term lease of Memorial Medical Center.

The Telshor Fund is meant to support the city’s sick and indigent populations, often through disbursements to local community nonprofits, as well as supporting various needs of residents. According to Chief Administrative Officer Barbara Bencomo, the Telshor Fund currently has a market value of $42.9 million.

"Given that the Telshor Fund is not a fund that has a consistent revenue stream," Mayor Pro Temp Johana Bencomo said. "Once that is gone, that will be gone. I think we have to deeply understand what that means."

There are currently six projects that the city has already committed Telshor Fund money for as part of the FY25 budget, including $3.5 million for two affordable housing developments.

Some of the new projects proposed by department leaders would take $22.8 million from the Telshor Fund.

Some of the proposed new projects include $2.5 million for improvements to Apodaca Park and Pioneer Women's Park; $1.1 million toward the establishment of a Real Time Crime Center; $2 million for the Fire Station No. 9 and $10 million for three different affordable housing projects.

If all proposed projects were to add funding from the Telshor Fund, the fund would have a remaining market value of approximately $14.9 million.

"What I'm in favor of is spending the Telshor Fund to get caught up with a lot of things that have been neglected like our parks," Mayor Eric Enriquez said.

"We need to spend some money for our public safety and for the greater good of our community."

City proposes raising gross receipts tax

While the Telshor Fund is limited in both the remaining balance and the nature of projects it could fund, in a joint interview with the Las Cruces Bulletin, newly hired city manager Ikani Taumoepeau said the city needed to find new revenue streams in order to fund public safety, street improvement, park improvement and public facility projects.

During the work session, deputy economic development director Chris Faivre presented a recommendation to increase the city's gross receipt tax rate. Faivre said the City could generate about $9 million per year through ordinance that would raise the tax by 0.2375% and another $11 million per year through referendum by raising the tax by 0.3250% ― if approved by voters in November.

If Council adopts both recommendations, it would equate to an increase of about 56 cents per $100 spent on goods and services.

Both proposals would require more consideration at a future work session, as well as public input, Faivre said.

The City's current GRT rate is 8.0625%. It sits behind municipalities such as Taos (9%), Santa Fe/Ruidoso/Farmington (8.1875%), Sunland Park (8.175%nd Anthony (8.1250%). Albuquerque is lower at 7.6215%.

"The ordinance has the authority to increase the GRT," Faivre said.

"There is a timeline we would need to adhere to if we are going to get this on the ballot in November, which would means we have to have a consensus in early August."

Jason Groves can be reached at 575-541-5459 or jgroves@lcsun-news.com. Follow him on X @jpgroves.

This article originally appeared on Las Cruces Sun-News: City proposes $589.5 million budget for 2025