Alamogordo NM
10-29-2026 11:13am

Commentary: Vote No on the County LEDA Tax: Show Us the Plan, the Books, and Who Gets Paid

Alamogordo Editorial- On Tuesday, Otero County voters will decide whether to add a one-eighth-of-one-percent Local Economic Development Act (LEDA) gross receipts tax to nearly everything bought and sold in the county. Supporters describe it as a penny on an $8 purchase.

The real question is not the size of the penny.

It is whether this county government has earned the right to collect it, whether anyone has a plan to spend it, and who stands to benefit when it is spent.

On all three counts, the answer today is no

Voters should reject this measure and invite the county to come back when it can answer those questions in public.

Even its friends are asking "what's the plan?"

Former Alamogordo city manager Stephanie Hernandez, an economist who has run LEDA-funded projects herself, put it plainly in a recent radio segment: "If this tax passes, what's the plan?" She noted that revenue from an eighth-cent tax will take years to accumulate before it can fund anything large, and that funding without a strategy is "just a wish."

She is right, and the county has not answered her. There is no published list of target industries, no site-readiness inventory, no pipeline of prospects, and no estimate of how many jobs per dollar the county expects. Voters are being asked to approve the revenue first and trust that a plan will follow. That is backwards.

Other community leaders are making the same point. Responding to an online explainer of what LEDA allows under state law, former Alamogordo Mayor Susan Payne wrote that state law "provides a framework, not a strategy" for Otero County, and that local governments have the flexibility to tailor LEDA to their own communities for exactly that reason. Her concern, she stressed, is not with LEDA itself or with the county's wish to pursue economic development. It is with asking residents, "many of whom are already struggling financially," to support another tax without a clearly defined local strategy, measurable goals, and a plan for achieving results.

Payne's conclusion is the right one: "Economic development should drive the need for funding, not the other way around. We need a strategy first, then determine how to fund it."

A county that cannot reconcile its own books

The strongest argument against handing Otero County a new revenue stream is the county's own audit.

The independent audit for the fiscal year ending June 30, 2025, by Hinkle + Landers, identified six findings, three of them repeats from prior years, including several material weaknesses in internal control. Among them:

Capital assets: tracking and depreciation errors required more than $3.3 million in adjustments. This is a repeat finding first flagged in 2023.

Cash reconciliations: June 2025 bank reconciliations were off by $1.37 million.

Investments: cash and investments were commingled without fund-level separation, another repeat finding.

Federal grants: on the Operation Stonegarden program, all seven tested financial reports were filed late and six did not match the ledger; only seven of 24 required subrecipient reports were collected. Auditors issued a qualified opinion on the program.

Uncollateralized deposits: county deposits exceeded pledged collateral by $1.5 million, a violation of state law, and also a repeat.

    LEDA's promised safeguards are project participation agreements and clawback provisions. Clawbacks only work if someone tracks performance, documents shortfalls, and actually goes after the money. A county that auditors say cannot consistently reconcile its bank accounts or collect required reports from its own federal subrecipients is not positioned to police complex, multi-year incentive contracts with private businesses.

    A budget already in the red

    The county's FY26 budget projected roughly $65.5 million in revenue against about $84.9 million in spending. It has paid more than $2 million to settle a wrongful-death suit over a 2023 suicide at the county detention center. It has lost expected dispatch revenue after Alamogordo left the regional dispatch authority. And this spring commissioners called a 12-minute emergency session to extend the ICE contract at the Otero County Processing Center, because that facility is the only source of revenue to repay the bonds that built it.

    A government under that much fiscal pressure will feel enormous temptation to treat a new "dedicated" fund as a cushion. LEDA money cannot legally pay for road graders or lawsuit settlements, but it can be steered toward whatever projects are politically convenient, and it can sit idle while the county figures out what to do with it.

    A habit of governing around the voters

    This is not the first time the commission has reached for gross receipts revenue. In August 2023, the commission voted 2–1 to impose a one-eighth-cent GRT increase without putting it on the ballot at all. Commissioner Amy Barela, the lone no vote, argued that voters should decide.

    In 2022, the State Auditor sent the county a letter citing potential violations of county and state procurement code over its contract with EchoMail for an audit of the 2020 election, and questioned whether the commission had treated its office as a public trust. A separate state audit of county finances grew out of a commissioner's improperly approved travel voucher.

    These episodes are not about economic development. They are about whether this county follows its own rules when spending public money. The track record says it often does not.

    The local LEDA record is not reassuring

    Alamogordo has run a LEDA program since 1996, and its history is a preview of what a county program could become:

    The city sued the operator of the Fun Center bowling facility for breach of contract after the project, built with LEDA funds and public bond money, went sideways.

    A proposed $1.9 million LEDA allocation drew public accusations of favoritism and of overriding staff recommendations, with residents asking how a dozen part-time jobs justified that much tax money.

    In December 2025, the commission awarded $650,000 in LEDA money to upgrade bowling lanes at the city-owned Rocket City Family Fun Center, after the finance director reminded commissioners that LEDA funds can also be used for debt service and quality-of-life projects, not just job creation.

    So much LEDA money piled up unspent that voters in 2024 rededicated the city's LEDA tax and at least $4 million of its fund balance to build an indoor pool. A pool may be a good investment, but it is not economic development, and it shows how a "dedicated" economic development tax drifts toward whatever a governing body wants once the balance grows large enough.

    As recently as May 2026, roughly $900,000 to $1 million in remaining city LEDA funds sat on the table while commissioners argued over whether to spend it on demolishing derelict buildings.

      If the city, with an experienced economic development staff, struggled to deploy LEDA money cleanly, there is little reason to expect better from a county whose auditors keep flagging basic control failures.

      The ballot language is broader than it sounds

      The state model ballot question the county is using makes retail businesses, cultural facilities, and arts and cultural districts qualifying uses. That is a wide door. It means LEDA dollars can subsidize a retailer that competes directly with existing local businesses that never asked for a handout, and those existing businesses will be the ones collecting and remitting the tax. Gross receipts taxes fall on services and labor as well as goods, and they hit lower-income households hardest because they spend a larger share of what they earn.

      The Chamber's role deserves a straight answer

      The Alamogordo Chamber of Commerce has posted what it calls a "public service announcement" about the measure. It describes the tax rate, lists qualifying uses, and highlights clawback safeguards and the 83 New Mexico communities with LEDA ordinances. It does not mention the county's audit findings, its budget gap, or any of the local LEDA controversies. A neutral voter guide would.

      That matters because the Chamber is not a bystander.

      In March 2026, the county attorney recommended that the commission authorize the Chamber as the lead organizer of a new Otero-Lincoln regional economic development initiative, handling day-to-day coordination and marketing. The Chamber's own website directs businesses considering relocation to contact the Chamber, and historically it shared office space and staff with the Otero County Economic Development Council, which makes recommendations to the city and county on LEDA-type incentives.

      To be clear: no public evidence has surfaced of any agreement to pay the Chamber from LEDA revenue in exchange for its support, and this editorial does not allege one. But voters are entitled to know, before they vote, whether the organization promoting this tax expects to administer, market, or be paid from the money it raises.

      That is a basic conflict-of-interest disclosure, and it costs nothing to make.

      The Chamber and the commission should state publicly, in writing:

      1. Whether any LEDA revenue is expected to fund Chamber contracts, staff, marketing, or administrative fees, directly or through the regional initiative.
      2. Whether the Chamber or any Chamber board member's business has discussed a LEDA project with the county.
      3. Who will review LEDA applications, and whether that body will meet under the Open Meetings Act with published scoring criteria.

      If the answers are "no, no, and a public board," say so.

      Silence invites the very suspicion the Chamber would presumably like to avoid.

      What a credible proposal would look like

      Voters are not against economic development. They are against writing blank checks. A proposal worth supporting would come with:

      A published economic development plan naming target sectors and specific sites, adopted before any tax is collected.

      A clean audit, or at minimum a resolved corrective action plan for the repeat findings.

      A requirement that every project participation agreement, job commitment, and clawback action be posted online and reported annually.

      A sunset clause, so the tax expires unless voters renew it after seeing results.

      A written prohibition on using LEDA revenue to pay advocacy organizations or their members for administration or marketing.

        None of that is in front of voters on Tuesday.

        Vote no, and ask for better

        Economic development does not happen by accident, and it does not happen by tax increase alone. Otero County has not shown a plan, has not shown that it can manage the money it already collects, and has not answered reasonable questions about who will benefit. Until it does, the responsible vote is no.

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