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opinion editorialsThis editorial first appeared in the Albuquerque Journal. It was written by editorial page staff and is unsigned as it represents the opinion of the newspaper rather than the writers
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Friday, January 23, 2009
Add Equity to State's Cap on Property Taxes
The whole idea of the Legislature placing a 3-percent cap on property-tax valuation increases back in 2001 was to protect owners who stayed put from being taxed out of their homes as newcomers moved into the neighborhood and values rose. It was not to disincentivize people from buying an existing home or to hand taxing entities a sweet windfall courtesy of folks who for one reason or another moved into a home.
But that's what's happened. Now it's up to the Legislature to add equity to its original good intentions.
One important step proposed by Albuquerque Republican Rep. Richard Berry is to have Realtors or title companies disclose likely tax bills — not just previous ones — to buyers before closing. But that's just a partial fix toward minimizing the shock factor of so-called tax lightning.
So far, Albuquerque Republican Rep. Mark Boitano's proposal to extend the 3-percent cap to all properties looks like the best bet for getting a little equity. While it won't help out folks like Barbara Brown, who downsized after her husband died and was hit with a Bernalillo County property-tax bill 54 percent higher than the one on her big house, it will put a stop to having the new neighbor pay wildly higher taxes than the family living in a similar home next door for the exact same public services.
Boitano's second bill, for which he says there is “little political will,” would do away with the cap entirely. In the grand scheme that's probably the fairest approach in that every property would be brought up close to current market value. But it only makes sense if the taxing entitites — cities, counties, schools and hospitals — scale back current tax rates to the revenue-neutral point to forgo a fiscal windfall at the expense of homeowners. And it brings us back to the original problem of longtime residents being taxed out of their homes.
Good intentions set the 3-percent property-tax valuation cap back in 2001. Informed results should help revise it with an eye toward improving equity in 2009.
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