Albuquerque plans to sell $11.5 million of gross-receipts tax refunding revenue bonds next week to refund Series 2000 variable-rate housing project bonds with fixed-rate debt.
The GRT bonds, backed by the city’s 1.225% state-shared gross receipts tax, carry ratings of AAA from Standard & Poor’s and AA from Fitch Ratings.
The bonds, which mature in 2018, are also secured by project revenues of three multifamily apartment projects: Bluewater Village, the Beach, and the Manzano Vista.
Standard & Poor’s cites the city’s status as an economic hub and its strong debt service coverage in conferring the top rating.
Gross receipts taxes are collected by the New Mexico Taxation and Revenue Department on a broad array of items. Albuquerque’s state-shared GRT revenues have increased by an average of 6.6% per year since 2003 to $187 million in fiscal 2008. Gross-receipts tax collections were flat in fiscal 2008 due to the softening of the local economy and construction. A one-eighth-cent tax cut also went into effect July 1, 2008.
Since 1975, however, collections have declined only once, dropping 0.2% in fiscal 1991. Based on the first two months of GRT revenues for fiscal 2009, the revenue stream is trending down by about 2%.