A proposed suspension of the Gross Receipts Tax (GRT) on medical expenses has sparked significant concern among New Mexico lawmakers, with potential local government revenue losses estimated at $2.5 billion. During a recent Senate meeting, discussions highlighted the implications of this tax change, particularly its impact on cities like Santa Fe and Albuquerque, which could face losses of $7 million and over $20 million, respectively.

Senators expressed apprehension about the long-term effects of eliminating the GRT on medical costs, emphasizing the need for careful consideration of local government finances. One senator noted, “We’ve gotten ourselves in a world of trouble trying to do hold harmless,” referencing the complications that have arisen from previous tax adjustments.

The conversation also touched on a related proposal by Senator Steinborn to eliminate the GRT for all medical expenses, which could further complicate the financial landscape for local governments. Lawmakers are weighing options, including potential deductions or exemptions to mitigate the financial blow to municipalities.

As the committee continues to deliberate, the urgency for a balanced approach that protects local revenue while addressing healthcare costs remains a pressing concern. The outcome of these discussions could significantly reshape the financial framework for New Mexico's local governments in the coming years.