House Committee Tables Memorial On Study Of LANL GRT Distribution

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Los Alamos County Council Chair Sara Scott addresses the House Local Goverment, Land Grants and Cultural Affairs Committee Tuesday morning at the Roundhouse. Photo by Maire O’Neill/losalamosreporter.com

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Los Alamos County Council Vice Chair Pete Sheehey speaks with community activist Heather Nordquist following Tuesday morning’s committee hearing o HM 63. Photo by Maire O’Neill/losalamosreporter.com

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Rep. Joseph Sanchez introduces HM 63 to the House Local Government, Land Grants and Cultural Affairs Committee Tuesday morning. Sanchez is also a member of that committee. Photo by Maire O’Neill/losalamosreporter.com

BY MAIRE O’NEILL
maire@losalamosreporter.com

House Local Government, Land Grants and Cultural Affairs Committee members voted 4 – 2 Tuesday morning to table HM 63, a memorial that called for a task force to review the distribution of the gross receipts tax generated by the prime contractor at Los Alamos National Laboratory.

Introducing the memorial, sponsor Rep. Joseph Sanchez of Alcalde said he had fully supported SB 11, a bill signed by Gov. Michelle Lujan Grisham removing the gross receipts tax non-profit exemption for national laboratories. He acknowledged that Los Alamos County was the most financially impacted and that the County used the GRT to provide infrastructure to support the Lab.

“There is also recognition of the financial economic development investments the County has made in the region. The legislative focus for the last few years has been on perpetuating the status quo which means that one of the richest counties in the nation will continue to reap incredible financial benefit from the surrounding counties in which a majority of the Laboratory employees live, some of which are the poorest in the nation and will not,” Sanchez said.

Sanchez said the goal of the memorial is to study that issue, to promote “fairness and equity”.

“Times have changed. The bulk of the employees live off he hill. The surrounding the counties in the region have helped build the Laboratory,” he said.

Sanchez said there are hundreds of union workers that are plumbers, pipefitters, and more who live off the hill.

“We have division leaders, group leaders that all come from the Valley. The point I’m trying to make is, in discussions with different people one of the topics that is frequently brought up is that the majority of the workers at the Laboratory are technical. What I tried to tell this person is why would that matter. You need technical people to make that place work,” he said.

Sanchez said Los Alamos is extremely important to Northern New Mexico and that without it, he doesn’t know where the economy would be.

“My generation has been fortunate – this is one of the places that keeps people who do get educated here in the state…. LANL is a godsent,” he said.

Ron Lovato, Governor of Ohkay Owingeh said the Pueblo fully supports a more equitable distribution of help from the Laboratory “so that we can better support the Laboratory”.

Community activist Heather Nordquist spoke to the committee from a letter she had published online and in the Los Alamos Reporter. See https://losalamosreporter.com/2019/03/04/open-letter-to-house-committee-members-on-house-memorial-63/. Nordquist urged the committee to at least do the study so that some equality might be found and the playing field leveled between Los Alamos County and their neighbors.

Most vocal in favor of the memorial was Espanola Mayor Javier who noted that he is also a member of the Regional Coalition of LANL Communities board.

“We as a group go to Washington. We advocate on behalf of money and jobs at Los Alamos, but as advocates, as a community we really want to make sure that Los Alamos is in a prime position to succeed. We wish that they do nothing but prosper because we gain from that,” Mayor Sanchez said. “At the same time, the letter that was sent out from the Governor’s office quotes two of the committee members amongst others as saying that the work that has gone to ensuring that the taxes remain, benefits everyone in Northern New Mexico. I am in full support of this study to determine exactly how that is done.”

Sanchez said one thing that’s key to him is that Los Alamos schools receive an extra $9 million.

“That’s amazing and we love that because it helps to educate all of the kids in Northern New Mexico. But what it fails to recognize is that we then take all of those children out of the Espanola schools and drive them up the hill for that better education. Not only does it take children away from our city, it literally takes dollars away from them because we count them per head,” he said. “So as that swish sound goes up the hill, so do the economic dollars that are involved.”

Sanchez said he’d like to understand the economics that are involved.

“As a conservative, I’d like to ensure that we do the best that we can to populate our citizens with the education, the safety, the infrastructure that we can in order to provide a better future for them. But if there are any ways that these funds can be used to improve and strive for and really push economic development throughout all of Northern New Mexico, I would really be open to understanding what that would look like and that’s why I am here in support of this memorial,” he said.

Also present was Drew Setter, a lobbyist for Santa Clara Pueblo who said the Pueblo thinks the memorial can help lead to a dialog between the communities up and how better to support each other.

“They feel that the Lab is an asset for the entire region but there needs to be a better discussion on how to more equitably distribute support,” he said.

Los Alamos County Council Chair Sara Scott spoke against the memorial saying she appreciated very much the opportunity to speak and reinforce that Los Alamos County is absolutely committed to partnering with its Northern New Mexico neighbors. Council Vice Chair Pete Sheehey was also present along with the County’s lobbyist Scott Scanland, but neither addressed the committee.

“We look forward to building on past successes and real dialogue to identify how we can grow our partnerships to support the vitality and sustainability of the regional economy and community goals such as better education, as well as address existing and evolving challenges,” she said. “To accomplish this, we are reaching out to our neighbors, some of whom also have a number of newly elected officials. For example, we have a meeting scheduled on Friday with Rep. (Joseph) Sanchez and other local leaders. We are ready to continue to roll up our sleeves and get to work on specific actions and projects that will make a difference.”

Most vocal against the memorial was Rep. Susan Herrera, a member of the committee. Herrera told Rep. Sanchez that the two do not often disagree on how they are going to go about “changing things up north”.

“So this is interesting to me that I’m not in favor of this. And it doesn’t mean that I don’t want to work on changing things,” she said.

Herrera said she would like people to understand some things about Los Alamos and noted that she was CEO of the LANL Foundation for 17 years.

“I felt the overall purpose of the bill was to turn some from gross receipts from Los Alamos to Rio Arriba. The problem with that idea I think is that if we follow this logic – it doesn’t fit with gross receipts law. I’m on the tax and Revenue Committee and when you do a tax exemption trying to do something you do it for the whole state, you don’t do it from one county to another,” she said. “This could set up kind of a change of events where Mora comes to Rio Arriba and says you’ve got more gross receipts than we have, and Valencia comes to Bernalillo, and I think that’s the purpose of this and I don’t think that’s a very good way of doing it. If we’re going to do a change in gross receipts law, it ought to be for the whole state – that’s kind of how you tackle that. “

Herrera noted that the LANL Foundation is at about $5 million a year, $1 million of which is raised from the employees for scholarships in the seven northern counties. She listed the organizations created by LANL, including the Regional Development Corporation, the LANL Foundation, the New Mexico Small Business Assistance Program and the Technology Engagement & Entrepreneurship program.

“Collectively these organizations have made a huge difference in transferring wealth from the Laboratory to the surrounding communities,” she said.

Herrera referred to some statistics from the LANL economic development profile, including 6,750 projects with small businesses, attracting financing of some $313 million, creating or retaining 10,342 jobs with salaries totaling $375 million. She said the annual budget right now if $2.66 billion with salaries at over $1 billion and that there are 11,743 employees divided by where they live and where they participate. Herrera also said the Regional Transportation District was created in cooperation with the Laboratory and the counties of the north.

“It is a constant mix of working together. I think we always study this. I don’t think that this (memorial) is needed. I think this is a continual effort,” Herrera said.  She said several organizations are working together to see what they can do and that there’s a constant effort to reach out.

“So I think the Laboratory has done a pretty good job. Can we do more? Yes, and I think that’s where we are,” she said.

Rep. Sanchez said he respectfully disagreed.

“I know that I’m not a tax expert and I don’t know that people in committee are tax experts that’s why I am asking for a study. Fifty five percent of the employees live off this little island. It’s a great community but a lot of these people live in the Espanola Valley, or Pojoaque, or Nambe, El Rancho, Chamita, Hernandez, Alcalde, Velarde, Truchas, Ohkay Owingeh, Santa Clara, Abiquiu and a bunch of other communities. This is the LANL community,” he said.

Sanchez said that’s why a study is being requested.

“It got brought up that we should not make a special circumstance for this issue – that’s not what I’m saying. But if this applies to other places in the state, let’s make it a law that applies to the entire state. If they have a circumstance where the majority of the workers don’t live in that area and it’s regional, then maybe we do need to change our laws,” he said.

Committee members Chair Rep. Miguel P. Garcia, Rep. Herrera, Rep. Rachel Black and Rep. William Pratt voted to table the memorial and Rep. Kelly Fajardo and Rep. Sanchez voted against.