Commission voices opposition to House Bill 233
AZTEC — San Juan County commissioners voted Tuesday to approve a resolution opposing a bill under consideration in the current legislative session that officials said would cut further into county revenue.
The bill proposes cutting "hold harmless" payments — even as they are being phased out — to local governments that create taxes to replace the lost revenue.
In 2004, New Mexico officials exempted food and medicine from the state's gross receipts tax. It then created so-called "hold harmless" payments to be paid by the state to cities and counties to make up for the lost revenue. But in 2013, Gov. Susana Martinez signed legislation phasing out the hold harmless payments, which analysts said were unsustainable. The law postponed the start of the phase-out until 2015 and cuts the payments gradually over a 15-year period. Local governments were given the authority to raise taxes to compensate for the loss of revenue.
The commission unanimously approved the resolution during its Tuesday afternoon meeting in Aztec. San Juan County Executive Officer Kim Carpenter will take the resolution to Santa Fe on Wednesday to meet with a sponsor of the house bill, Rep. Jason Harper, R-Rio Rancho. Carpenter told commissioners that it is unusual to create resolutions in opposition to legislation, however he thought it was necessary because the issue keeps resurfacing.
The phaseout of payments led to a loss of revenue for San Juan County and the city of Farmington. Cities with populations less than 10,000 are not included in the phase out process, which means Aztec and Bloomfield were not affected.
Faced with a choice of cutting services or raising taxes, San Juan County approved two taxes to make up for the loss of the hold harmless payments. House Bill 233, sponsored by Harper and Rep. Cathrynn Brown, R-Carlsbad, would reduce the amount of hold harmless payments that cities and counties could receive during the phase-out if they approve new taxes to make up for the loss of revenue from hold harmless payments.
Carpenter said the proposed bill would punish governments that imposed the taxes. But it would add approximately $40 million to the state's general fund the first year, according to the fiscal impact report.
"The state is hurting for money," Carpenter said.
In other action, commissioners approved a resolution during the board of finance portion of the meeting that would allow property owners to schedule 10 payments for their property taxes rather than two.
"This probably is the single best resolution that I probably have been involved with," San Juan County Treasurer Mark Duncan told commissioners.
He said spreading out the payments would make it so people who have paid off their mortgage will not face two large property tax payments each year. The property owners would still pay the same amount in taxes, however it would be spread out into smaller payments.
"I think it will be a great, great thing for the people of this county," Duncan said.
In 2008, state lawmakers approved legislation allowing payments to be made on property tax throughout the year, however the county did not have the software to make it available to local residents.
"It will help a lot of folks that have their property paid for," Duncan said.
Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.