New Mexico Votes

This bill has been modified (see below) from the original by committee to go from a tax lightning “bolt” removal to a tax lightning “flash” but still does absolutely nothing about the disparity already created by 2001 HB 366. By spreading out the re-evaluation assessment value after a property is exchanged for a 5 year period will only continue to create an even greater disparity between two comparable properties. The only thing this bill has done is ease the pain of the increase, but has not resolved the real issue: the disparity of 2 comparable properties and the inequality of what those property owners have to pay in real tax dollars;        

4. On page 2, line 23, after "Code", insert "; provided, however, that if the provisions of this subsection result in an increase in the value of the property, that increase in value shall not be immediately effective but shall be phased in at the rate of twenty percent of the amount of the increase in each tax year, beginning in the tax year in which the determination pursuant to this subsection is made, until the amount of the increase has been fully applied to the value of the property".

Next year, we will have to figure out an equitable way to address the disparity problem with comparable residential properties. At the same time, we also need to address the disparity between who actually pays property taxes and who is exempt from property taxes. Currently there are two types of exemptions: individual residential primary property owner exemptions and institutional exemptions (non-profits). These institutions are provided the same services by the City and County as individual property owners and yet pay NO property taxes. Something is not right about that and it needs to be changed.

My final assessment of this bill is that it is a reasonable compromise, along with HB261. The most valuable change with HB 160 is limiting re-evaluations to sales and re-zoning only. As a new resident to NM since 2005, I had to ask myself ‘why’ HB 366 was even written in the first place. The original sponsor was Ben Lujan of Santa Fe. It seems that all the celebrity influx in the ‘90’s was driving the price of real estate up very quickly and the mass appraisals were causing concern by some the established families in the Santa Fe region. This rapid increase in property values in the Santa Fe area was unique to that area only and not the rest of the state, especially the southern part. Prior to 2001, property values in Southern NM average less than 3% increase in market value so HB 366 would have artificially accelerated their property assessment values while slowing down the assessment increases in Northern NM. However, between 2001 and 2007, market values in Southern NM actually increased by an average of 12% per year, so the 3% cap has help a lot of the more established families that want to keep their properties within the families by transferring them to the children without a sale. However, very few families do this anymore. We have become a transient society and the children move on to new places to live and work.

In 2008, market values of property in Southern New Mexico have slowed to less than 3% increase again and in some places have declined in market value. Without re-evaluations, there is nothing to stop the automatic 3% increase in assessments across the board even when market value decline. HB 251, also sponsored by Al Park, addresses the decrease in market values, but this bill was not part of the property tax package (HB 160 and HB 261) that was approved by the House. Why?