“Tax lightning bill could become law” plus 1 more |
| Tax lightning bill could become law Posted: 11 Mar 2011 12:07 AM PST SANTA FE - Only one of six different bills aimed at fixing a property tax law that several district judges, including one in Las Cruces, say is unconstitutional appears to be making progress toward possible passage this legislative session. Changes proposed under Senate Bill 108 would reduce the taxable value of various residential properties by amounts totaling millions of dollars and result in tax increases of about 10 percent or more for some owners. The bill seeks to address inequities among taxpayers created by a 2001 law that caps increases in home values for tax purposes at 3 percent a year, unless and until the property changes hands. At that point county officials can reassess the property at market value. The law's original purpose was to protect longtime residents from experiencing swift increases in tax bills caused by rapidly escalating property values in their neighborhood - a situation referred to as "tax lightning." Or, as one couple who is challenging the law in court said, it's aimed at protecting "the little old lady on Canyon Road whose house has become so valuable she can't afford to live there any more." But two judges in Bernalillo County and one in Do-a Ana County have ruled the law unconstitutional because it allows for an adjustment of property tax liability based on something other than age, income or occupancy - the only acceptable bases for property tax adjustments according to the state Constitution. Critics say the law puts an unfair burden on people who haven't owned their homes very long, because the "tax lighting" is simply delayed until the home changes hands and the increased tax burden is placed on the new owners. Recent buyers often end up with tax bills much higher than those of their neighbors living in similar homes.Emboldened by the court decisions, about 2,400 Bernalillo County taxpayers filed for refunds in state District Court on the grounds that the state law is unconstitutional. One representative case on the topic has been sent to the New Mexico Court of Appeals while the others have been stayed pending the higher court's decision. Senate Bill 108 proposes to fix the inequity by recalculating the values of homes that changed hands between 2004 and 2010. The values would be recalculated as if those properties also had been given the protection of the three percent cap. The proposed law then would maintain the cap on valuation increases for all residential properties, regardless of whether they change ownership. The bill's sponsor, Sen. Tim Eichenberg, D-Albuquerque, said the bill proposes to begin the fix in 2004 because that is when all 33 counties in the state began applying the cap created by the 2001 law, which was implemented over a phase-in period. Recalculating values under the proposal would likely decrease the total value of residential property, which could result in a higher tax rate to generate the revenue needed. Longtime owners whose property values were limited by the current law's cap could see higher tax bills. The adjustment could also result in a lower tax bill for those whose values weren't capped earlier but now would be reassessed as if they had been. Estimated amounts of those increases or decreases are a topic of debate. Santa Fe County Assistant County Assessor Gary Perez said his preliminary number crunching indicates that making the adjustments would result in an approximately $633 million decrease in the amount of taxable value in the county. That decrease would result in a higher tax rate, Perez said, which means some property owners could see an increase of as much as 13 percent in their tax bills. "Somebody has to pay the difference," Perez said. "When you bring down the value, you have to make it up in a tax rate increase." Eichenberg said his calculations indicate a smaller tax increase, perhaps around 10 percent for those who do experience one. "So if you pay $2,000 now on a $300,000 house," he said, "it goes up to about $2,200." Sens. Mark Boitano, R-Bernalillo, and Steven P. Neville, R-Aztec, also introduced bills aimed at addressing the issue, but neither made much progress toward becoming law. Parts of those bills have been rolled into SB108 and Boitano and Neville are supporting that bill. SB108 has cleared the Senate and several House committees. The only committee it still must get through before reaching the House floor is the House Taxation and Revenue Committee, where similar bills died last year. House Bill 451 - which sponsor Rep. Terry H. McMillan, R-Las Cruces, says is "almost identical" to SB108 - was scheduled to be heard for the first time on Thursday. But House Bill 511 - which was created by a panel of assessors and other tax officials put together by the New Mexico Association of Counties - is stalled in committee. With the days left in the current session quickly waning, other bills on the topic seem destined to suffer the same fate. It's possible that - as happened last year - none of the proposed bills will pass, leaving the situation unchanged for another tax year. But Eichenberg and Perez both said the pending lawsuits and pressure from taxpayers likely will push lawmakers to adopt a fix. "I think it's time for the Legislature to act," Eichenberg said. "If we don't' act, I think the courts are going to act for us." Contact Phaedra Haywood at (505) 986-3068 or phaywood@ sfnewmexican.com. 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| 10 Highest Property Taxes in Country Posted: 10 Mar 2011 03:31 AM PST Businesses in Westchester County, a suburb north of Manhattan, pay the highest property taxes in the nation. And they are saying, "Enough is enough." "Everyone assumes property tax is a homeowner issue, but it's really a business issue," said Paul Vitale, vice president of government and community relations with the Business Council of Westchester. The organization has about 1,200 members and is lobbying to lower property taxes to keep businesses in the area. Westchester is the county with the highest median real estate taxes in the country, at $9,044, according to the Census Bureau's American Community Survey. According to Vitale, businesses pay 44 percent of property taxes in the state of New York. Kail Padgitt, an economist with the Tax Foundation, a non-partisan tax research group in Washington, D.C., said property taxes are among the most transparent taxes. For example, while taxes on wages automatically are held from a paycheck, he said, real-estate owners can get more irked by having to pay one or more checks each year for their property taxes. "With income tax, you have withholdings, you see it but you don't feel it. You don't think about the income tax," said Padgitt. "Property tax is very visible." Marsha Gordon, president and CEO of the Business Council of Westchester, is in favor of Gov. Andrew Cuomo's proposal to cap property taxes to combat the high costs businesses and residents pay. Cuomo's bill was approved by the New York State Senate on Jan. 31. The bill most recently was before the state assembly. "Certainly, as a business organization we see high property taxes as detriment to business growth," Gordon said. "We want Westchester County in New York [to be] a place where businesses stay and thrive." Donna Greene, a spokeswoman for Westchester County Executive Robert Astorino, agrees that property taxes are too high, though said there are many components behind property taxes. Property taxes levied on behalf of the county itself are about 18 to 20 percent of a real estate owner's property tax bill. Other property tax levies may go toward municipalities or school districts. "Of course, we're well aware that the high county taxes in Westchester County need to be dealt with," said Greene. "We don't want the dubious distinction for highest taxes." This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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