Tax Lightning Still Shocking

“Tax Lightning” was first used to describe the shock a homeowner experiences upon receiving the initial property tax assessment from their respective county. It has since become more of an umbrella term to reference a larger problem: a severe property tax inequity among homeowners in New Mexico. When ownership of a property transfers, the property tax may be assessed by county assessors at current market value, pursuant to legislation passed in 2001 (HB 366). This has only become a hot topic in the past few years. People who purchased or developed properties at the height of the real estate bubble are paying inflated property taxes. Two property owners in the same district, perhaps even door-to-door, may be paying severely disproportionate property taxes. “Tax Lightning” remains an important issue; particularly with the 2009 state legislative session impending. This trend in property assessment at “current and correct” market value serves the budget concerns of county bureaucrats but chills our already weakened economy by penalizing home buyers.
While the weak housing market certainly makes it more difficult for potential home buyers to pull the trigger, the reality of “Tax Lightning” further hinders the market from returning to liquidity in New Mexico. A potential homeowner won’t enter the market because they face a significantly-increased property tax burden. While this is bad enough for those who are looking for bigger and better housing, the problem is even worse for current homeowner such as seniors, retirees, and those who simply need a lower house payment. Their incentive is not to downgrade to a smaller, more affordable house because they may wind up with a comparable monthly payment for a less valuable property, due to the new assessment and subsequent tax increase.
For some time now local newscasts, newspaper articles, and blogs have attempted to voice the concerns of those homeowners most directly affected by Tax Lightning. But the public outcry appears to have had little effect on this policy. Challenged assessments are continually shot down. The answer given to contesting parties has been the same, unaffected by public outcry: your property tax was assessed pursuant to the law. It follows then that new legislation is the only real means for change. Earlier this year, Senator Mark Boitano sponsored two bills addressing Tax Lightning which county assessors lobbied against. Bernalillo County Assessor Karen Montoya said that her office had considered the fiscal implications and determined that the State would lose too much revenue. The bills ultimately failed. In 2009, Senator Boitano and his colleagues will introduce new legislation that may be more amenable to the opposition. This new legislation may propose the following:
• Clarifying legal nuances regarding the formula to calculate property taxes and the definition of “current and
correct” and “valuation maintenance.” This may narrow the gap between those paying too much and those
paying too little.
• Applying yield control to debt service in addition to operating costs
• Maintaining a 3% cap regardless of a change in ownership
• Removing the 3% cap, reassessing all properties, and then imposing the cap again. Phase in the heavy
increase experience by some and the decrease experienced by others over a 4 year period.
It is clear that this issue is of great concern to those most directly affected. It should be of concern to everyone. It appears that legislation is the only way to interfere with the new trend in assessment. People are seeking shelter from the lightning storm. Concerns should be voiced to state legislators. The 2009 legislative session draws near, and with it a new opportunity to properly address this issue. The desperate state of our real estate market and the extreme dissatisfactions of property owners should be enough to influence legislation.

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8 Replies to “Tax Lightning Still Shocking”

  1. Now that the law has been declared unconstitutional, what can property owners do to most quickly get our assessments changed?

    I don’t have much faith that the assessors will move promptly on this unless they are prodded hard. With inaction, I will continue to be robbed of thousands of dollars.

  2. I sent the following e-mail to Denator Michael Boitano. I’m still waiting for a response:

    “To: boitanom@aol.comCc:Bcc:Date:Fri, Aug 14, 2009 10:50 am
    Hon. Mark Boitano, NM State Senate

    Dear Senator Boitano:

    I wish to thank you for your support in helping to overturn the inequitable tax process known commonly as “tax lighting”.

    My specific case is that I bought a house in NE Albuquerque last year and this past April the County assessor increased my valuation by about 45%. Taxes on this increased valuation will be due this November.

    What should persons affected by the court ruling do? Do I need to file an individual court challenge as the Journal article by Sean Olson implies or will this matter be resolved automatically for all persons in the same tax class.

    If the matter is not yet fully adjudicated and settled and I am required to pay the taxes in November, would I then be entitled to file a claim for refund?

    Gary Guist”

    1. Hi Gary,
      I am also concerned about this unfair increase in Property Taxes, I would like to get a meeting organized for those of us who purchased homes in this time frame and want to find out how to fight this. We don’t have much time Jan. 9 2010 is the deadline to file a lawsuit. I will be meeting others at Starbucks on Paseo and Wyoming on JAN. 2nd. at 9:00am. Please come if you want to talk about a way fight this issue. The more the merrier.
      Carla Padilla

  3. I would like to know who, besides Mr. Boitano, we can contact to help the process.

    We have lived in the same house for 12 years, but because we purchased it from the owner in 2006, our payment has increased by $200 a month due to the property taxes. We cannot sustain the increase indefinetely and do not want to lose our home, so what is our recourse?

  4. I know that these postings a bit old, but the issue still exists. Myself, along with another attorney, are working dlilgently to represent folks in court who have been impacted by this tax fiasco. If you are interested in protecting yourself or seeing if you are entitled to a refund, call our office in Albuquerque, NM at 505-880-8737. The Standridge Law Firm, P.C.

  5. If you find out any other source of recourse for this tax lightning please let me know. I just got about a $160.00 per month increase on my house payment, which I just bought last year. I reasearched my neighbors value and I am paying $1000.00 more per year for a smaller property.

  6. I would encourage everyone who is interested in this issue to review the positions of our gubernatorial candidates, because they are vastly different. Diane Denish supports applying the 3% to all homes. However, Susanna Martinez would support stopping tax lightning for all future sales but maintaining the increased tax rates for those who have already be affected by the policy. This is about 40% of the state homeowners. In my opinion, Ms. Martinez’s option is unacceptable. It would lock a minority of citizens into inflated taxes relative to their neighbors. Additionally, it would make selling these “poisoned” properties much more difficult.

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