Tuesday, November 22, 2005

UC continues to behave in a way that suggests little regard for our community

Could you please post anonymously from TryingToUnderstand.

From the Albuquerque Journal's Article, "LANL Deal May Mean Windfall," when asked about paying GRT, "The gross receipts tax will be paid. That's understood," said UT/Lockheed spokesman Rod Geer."
"A UC/Bechtel spokesman said he didn't have enough information to comment." In my opinion, incompetence is not the driver for this response as suggested by an earlier post by Snake Lips. Rather it is an attempt to not disclose the truth.

For the past six months, UC officials have been actively lobbying the state for the UC portion (approximately 2/3) of the bid to be tax-exempt. This can be confirmed by contacting the New Mexico State Tax and Revenue Department. UC continues to behave in a way that suggests little regard for our community.

Perhaps to not think about what has been going on at the Lab for the last year, I've taken an interest in local government and will try to relay information as accurately as possible:

(1) The County obviously does not receive GRT from the current Lab contract nor does it receive property taxes from most of the land in the County since it is owned by DOE. Therefore its tax base is GRT from Lab subcontractors, GRT from construction, GRT from limited retail and property taxes from individual and commercial property owners. When the Admiral instituted changes in the contingent work force program, he did so with total disregard to the impact of the local economy. Therefore, if you use the Library or Aquatic Center, you will have noticed reduced operating hours.
(2) The County used to get DOE support payments like the schools do now. Sometime in the last 10 years, the County received a one-time payment and the promise that DOE would transfer thousands and thousands of acres to the County for housing and development. The DOE has only transferred a few hundred acres to date.
(3) The infrastructure in this town is OLD as are the buildings. If UC is successful at its lobbying efforts as well as the rebid, the only way to pay for replacement will be through substantial property tax increases to those of us who own homes here.
(4) I contacted a County Council person regarding the rumor about Lockheed buying property from the County. This appears to be untrue but what he did tell me is that the County and schools are attempting to move its facilities (old Quonset huts) from the area across from Smith's so that a retailer like Target can be brought to town. The problem may be that there is not enough money to move and build new facilities unless the GRT base is increased.

If true this simply reflects the UC/LANL contempt for the welfare of New Mexico. And, LANL management is central to this issue. UC doesn't know, or care, about New Mexico affairs, including the GRT. Remember, the DOE pays the GRT, as a business expense. It costs UC nothing!!!

The LANL management has always opposed the GRT on the grounds that not paying it give LANL a "competitive advantage" over Sandia and others, as it lowers their overhead. This is, of course, a joke as the LANL management overhead is so bloated by other stupidities. But, for the sake of this "competitive advantage" they have deprived our poor state of some $60-70 million in GRT each year, which we can sorely use to fund the schools. Instead they created the LANL Foundation fraud, which gives a mere pittance to valley schools ($200 per student) all funded by the US taxpayers, but trickled down from LANL. We should all be properly grateful to receive our own tax dollars back from the mighty LANL!! This is nothing but LANL PR, and it is an outrage. The GRT could provide "real" money to address these problems, and we wouldn't have to kiss LANL's butt for it....

In summary, if UC/LANL management is still intent on not paying the GRT, they should be run out of town on a rail, as it clearly establishes that they don't give a damn about New Mexico. But then, we all know that don't we?
You are all so sure that LockMart cares more about LANL- But it may be all for show.

I stopped in the 'store front' the other day with a relevant suggestion. (No one else was there at the time.) The representative reading the newspaper did not seem too interested in any input, maybe I interrupted him....

P.S. to Lucky. LANL actually contributes quite a bit of GRT to
New Mexico now, through its commercial contracts with PTLA, KSL, and job shops. (source DOE.) However you are correct it will pay about 55% more under the new scenario.
What was your relevant suggestion, TM?

I've never felt compelled to post but after reading tm's comment, they seemed so self-serving (i.e., tm, are you a high-level manager motivated by your salary to write this?) that I had to respond. I am TRULY interested in what is best for science, national security, LANL employees, our community and our neighbors. I think original submitter's post was clear that GRT was received from subcontractors, so why does tm reiterate GRT from PTLA,KSL and job shops like it was an original thought? I sincerely hope that one of the papers asks this question to LANL/UC: are you currently working or have you worked with the state in the last several months to exempt UC from GRT??? I suppose they could answer non-responsively or they could tell the truth.
I guess I find all of the comments on this blog about the Gross Receipts Tax (GRT) rather puzzling. UC’s non-payment of the tax has nothing to do with responsibility toward the community, in my view. Nor do I view the impending start of GRT payments as somehow good for the lab.

Consider the issue of where the funds will come from in order to pay the LANL GRT: from the US taxpayers. This is nothing more than an increase in the federal tax shouldered by all of us in order to pay for – well, for the “service” of administering the laboratory. It’s a waste of money, if you ask me: $80M is far too much to be paid to the manager of LANL. I am with Brad Holian on this one, who stated a desire for neither of the applicant parties to be awarded the LANL contract. Instead, use any “new” funds to improve DOE management of science and technology programs, or – heavens – use them to fund more research on the things this country needs.

LANL employees should also be worried about the accounting for the future GRT payments. I am assuming that the staff member FTE cost will be raised in order to pay for the contractor fee and the associated GRT. Wonderful news, that. It will be yet more difficult for me to get proposals funded by Washington agencies to do national security work (or energy research, or environmental remediation, or ….). LANL, undoubtedly the most expensive place to do research in the nation, is about to get more expensive. More LANL staff members will be underfunded because funding sponsors will be unable to pick up the tab.

Nor is it realistic to think that LANL GRT payments will somehow be a benefit to New Mexico schools (a topic of particular interest to me, with a first-grade daughter in a public school in a rather horrid school system). Haven’t we learned this lesson from the state lottery? When new funds come in, our beloved legislature simply finds more pork-barrel projects to initiate. Improving schools is way down the list of priorities, and it is a far more difficult problem than posters to this blog acknowledge. (It’s also, may I say, off the topic.)

I am a physical chemist, not an economist, so if my analysis is gravely in error, please correct me. But I don’t look forward to the days when LANL is expected to pay the GRT. As a long-time New Mexico resident and taxpayer, I am acutely aware of the needs of state government. But the statehouse already does quite nicely with income taxes and sales taxes paid by high-income Los Alamos scientists.

Bernard Foy
The reason that GRT and community is linked is that not all of GRT goes to the state (unless of course the legislature institutes new law that allows the state to get everything). I don't know how much exactly, but somwhere between 30-40% goes to the local government (incorporated city/county of Los Alamos) to pay for roads, infrastructure replacement, civic buildings, economic development activities and other typical local government functions. I think this community needs a facelift, and I also believe that the high cost of doing business at the laboratory needs to be addressed in other ways besides being exempt from taxes that everyone else pays.
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