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Journal North: Home | Sports | Opinion | Obits | Entertainment
Wednesday, March 11, 2009
High-End Home Tax Defeated
By Vic Vela
Journal Staff Writer
Santa Fe city voters Tuesday soundly rejected a proposed special tax on the sale of high-end homes that would have helped finance affordable housing programs.
The City Council-sponsored transfer tax — a 1 percent tax on the portion of any Santa Fe home sale over $750,000 — was defeated 54 percent to 46 percent in a special election.
“I think the city's flawed proposal did them in,” said Donna Reynolds, CEO of the Santa Fe Association of Realtors, which aggressively campaigned against the tax.
The city estimated that the tax would have brought in about $600,000 a year for affordable housing programs and would have helped lower- and middle-income Santa Feans purchase homes in the city.
But more than $140,000 was spent in anti-tax advertising by a political group organized by Realtors. As shown by final pre-election campaign finance reports filed Monday, that was about eight times the $18,160 spent by proponents of the tax proposal.
“When you get outspent 10-to-1, it's hard to overcome that,” said Mayor David Coss, a supporter of the tax. “It is what it is. These things are hard to do, especially in a special election.”
Three of Santa Fe's four voting districts rejected the excise tax question. Only the south side District 3 — whose lower-income citizens arguably would have gained the most from the tax had it passed — supported it, with 728 voting in favor and 393 voting in opposition.
But District 3 has the fewest registered voters — 10,355 — and had the smallest turnout on Tuesday, with only about 10.8 percent of the voters casting ballots.
Conversely, the more affluent districts that would have been most affected by the tax measure — Districts 1 and 2, which includes downtown, east side and north side areas — came out against the tax and had heavier turnouts of 18 to 19 percent. About 59 percent of District 1 voters and 60 percent of District 2 voters rejected the excise tax.
The south side District 4 was close, with 51 percent voting against the tax and 49 percent supporting it.
The City Clerk's Office counted 8,402 votes cast through mail, early or day-of balloting. The overall turnout was roughly 16 percent of Santa Fe's 52,000 registered voters.
Opponents argued that the tax was illegal — a court challenge was pending but now apparently is moot — and said that by targeting only those who buy high-end homes, only a small number of home buyers or sellers would be contributing to affordable housing.
Proponents said the tax was intended to help the many Santa Fe workers who now have to live somewhere else because of the cost of acquiring a home in Santa Fe. They said the tax was small compared to the 6 percent commission Realtors charge on a home sale.
The tax on an $800,000 home sale would have been $500 — 1 percent of the portion over $750,000.
Opponents of the tax said they did a good job of reaching out to voters. They carpeted the city with mailers that became a campaign issue in themselves — tax supporters said they were misleading and suggested that the tax now or in the future could be applied to lower-cost homes.
“We did a phenomenal job of educating the public,” said Baro Shalizi of the Santa Fe Association of Realtors. “They (supporters) had an easy message to get out, which was that they were for affordable housing. We had to educate people about why this wasn't in the community's best interest.”
Councilor Christopher Calvert, a supporter of the excise tax, said the proposal faced an uphill battle because of the money spent by the other side.
“I don't know, I'm not a political strategist,” he said. “But there was an inordinate amount of money spent on the other side for a single issue.”
Realtors have said they would support a bond issue — financed by a general property tax on all real estate — to raise money for affordable housing programs. “The city implied Realtors are against affordable housing,” said Shalizi. “That simply isn't true.”
When asked about a potential bond question, Coss said, “Certainly, we can look at that.”
Calvert didn't sound optimistic about a proposed bond issue like one in Albuquerque that raised $10 million for affordable housing programs. “People hear a tax in these economic times and don't understand how it works,” he said. “I don't know if a bond issue would work better.”
There was another factor that may have contributed to the tax's defeat.
“The timing was just inappropriate,” said the Realtors' association's Reynolds. “People are concerned that in this economy that (such a tax) would add to their burden.”
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