ABQJOURNAL OPINION/EDITORIALS: Lawmakers Must Take Ownership of Tax Fix

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Handling of Pit Appeal Calls for a Time-Out

This 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

Saturday, October 24, 2009

Lawmakers Must Take Ownership of Tax Fix

          Here's your property-tax bill. It's for your new house, and it's a big bill, bigger than you ever imagined. You're probably scrambling mentally right now, trying to figure out how you're going to pay it.
        But wait, not one but two state judges have ruled your big bill, known in layman's terms as "tax lightning," is unconstitutional. Since 2001, the only time property values can rise above a state-mandated cap of 3 percent is when that home changes hands. The judges say that's wrong because it creates a separate class of people who pay more based on the arbitrary status of when they bought their homes. You're probably exhaling a big "whew!" right now. Not so fast.
        That "unconstitutional" law is still on the books, and so properties including yours are still being assessed according to it. And that means you still have to pay that whopper of a bill. Take comfort in the knowledge that after you scrape together the cash, you can gather all the loose change in the couch to try to hire a lawyer and file a "refund suit" to get some of that unconstitutional payment back.
        This insane system leaves homebuyers bearing the undue financial burden of a well-intentioned but seriously flawed 2001 property tax law designed to protect the poor and the elderly. Delayed valuations and the lack of a cap on commercial properties have piled weight on business owners as well; this year many were hit with increases around 300 percent.
        The New Mexico Legislature failed to ease any of the unfair property-tax load during the 2009 session; lawmakers must when the 2010 session convenes. State Sen. Mark Boitano, R-Albuquerque, plans to put a slate of reforms together and says "our property-tax system is unfair and terribly inequitable."
        Reforms could include last session's failed across-the board 3 percent cap — which, while equitable, distorts the housing market and standardizes the problem of never having all properties at full-market value. Or they could propose a version of Massachusetts' 1980 law that has all property assessed at market value but caps the amount taxing entities can collect while granting breaks to groups like the elderly, poor and veterans — though caps can harm services and schools, especially in a weak economy.
        It's a complex problem to tackle in a 30-day session devoted primarily to passing a budget, especially considering the tough economic times. But until the system is reformed, nobody who buys a home in New Mexico will be able to breathe a sigh of relief.

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