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As governor, I am working tirelessly to make New Mexico more competitive and more attractive both to the businesses and residents who are already here, and to those who are thinking about relocating to our beautiful state. During the years prior to my taking office, the growth of state government far outpaced inflation and the state’s population growth – and New Mexico taxpayers had to shoulder that burden.
Last year, when residents of the Mariposa East Public Improvement District in Rio Rancho came to me to explain an unfortunate loophole that resulted in a massive tax increase for homeowners in that area, I let them know we had to make sure this didn’t happen again.
Public improvement districts have been used successfully throughout the country for more than 20 years to give neighborhoods and business districts the ability to generate additional revenue for services and infrastructure that a city or county is unable or unwilling to provide. When they work as designed, the result is more attractive communities, an increased quality of life, and higher property values. They are important economic drivers that help build cities like Rio Rancho into thriving communities.
However, in this particular instance, not everything went according to plan. When that happens, taxpayers need to be protected.
As the law stands in New Mexico right now, there is an unacceptable level of risk to taxpayers who live in public improvement districts. When I met with residents of Mariposa East last year, they explained that the developer of this public improvement district had defaulted on its financial obligation, leaving those who owned property in the district to shoulder the massive remaining tax burden. In fact, they were facing a tax increase of more than 1,000 percent.
After that meeting, my office went to work with Rep. Jason Harper, R-Rio Rancho, whose district includes Mariposa, to craft legislation that provides much greater protections for property owners in order to ensure that New Mexico taxpayers can be confident the development we want and need will not lead to devastating tax increases.
House Bill 371, sponsored by Harper, provides a framework for cities and counties to use in the formation of a public improvement district to help provide certainty to the development community and ensure that local governments receive the information they need to make informed decisions. In particular, this legislation requires a feasibility study about the public improvement district itself, as well as any infrastructure projects, in order to ensure that these developments can be completed as promised.
This legislation gives property owners within the public improvement district the right to vote on formation of the district and promises that those property owners and potential buyers receive adequate information about their potential financial liability. It also places reasonable restrictions on the size of general obligation bonds and special levy bonds that may be issued by public improvement districts in order to prevent project developers from digging themselves into such a big hole that they can’t get out of it.
And in order to provide maximum transparency, the seller of a property within a public improvement district must disclose that a property lies within the district, and the purpose of the district, as well as disclosure of property taxes and other obligations the prospective owner faces. This disclosure must take place before the seller accepts an offer to purchase.
Sadly, we can’t undo the damage that has been done at Mariposa. However, I am grateful to the homeowners who came forward to draw attention to the problem of excessive tax burdens within public improvement districts so New Mexicans can avoid these problems in the future. I appreciate Harper’s leadership in carrying this legislation in Santa Fe and I am pleased to be able to sign it into law on behalf of all New Mexico taxpayers, who deserve to live free from fear of massive tax increases and know exactly what kind of tax obligation they face when purchasing property within a public improvement district.
— This article appeared on page 16 of the Albuquerque Journal
