It was expected that the income from the revenue from the gross receipts tax, which helps funnel money into the budget, would take a dive because of the pandemic. But the state said so far, those numbers haven’t fallen as badly as anticipated.
“I think we’re seeing in the data which is also encouraging is I think we’re seeing consumer confidence that’s surprisingly strong,” said Deputy Secretary of the New Mexico Economic Development Department, Jon Clark. “We’re seeing that because by June 2020, when we were well into the pandemic, we were seeing increased in-state retail spending over a year ago.”
The state said the reason for that bounce-back in the middle of the pandemic was because of the federal stimulus money, which helped encourage New Mexicans to spend. For the past couple of months, the state has been tracking GRT numbers in each county. They said Santa Fe County has had the largest drop out of the metro counties, about 16%. Bernalillo County also dropped as well, but not as much, roughly 6%; mainly due to so many retail stores closing.
Some of the smaller counties like Sandoval and Torrance got big bumps in their GRT sales, mainly due to an increase in construction projects in those counties. But the biggest impact the pandemic has had on sales is in the restaurant and entertainment business.
“Where we saw the largest decline was in arts and entertainment,” said Clark. “Obviously entertainment venues that are designed for groups to gather, enjoy and experience isn’t a good venue during a pandemic, so that took a large hit and we saw declines across the state in that.”
The state said in order to help offset those losses, New Mexico will need another round of federal stimulus money. Before the pandemic hit, the state said New Mexico’s sales revenue was on the rise, but believe after this pandemic, we won’t be in a recession for too long.
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