41% is approximately how much Santa Fe Mayor David Coss proposes to increase property taxes.
30 is the number of New Mexico counties with average property tax rates higher than Santa Fe’s.
" Nationally, people are looking at the wages being paid to municipal workers and saying, ‘Hey, these people are pretty well off. Why should they increase my property taxes to pay police $75,000 a year?’ or whatever it is."—Greg Ingram, president, Lincoln Institute of Land Policy
Because people pay sales tax a little all the time, they don’t really notice when it changes. Income taxes can fly under the radar because they are taken out of each paycheck. But property taxes, Tax Foundation Staff Economist Mark Robyn tells SFR, are very visible.
Property taxes also are the least-volatile and most-reliable income for municipalities.
“At the beginning of the year, you sit down and say, ‘What’s the value of all the assessed property in Santa Fe?’ and multiply that times a number and get $6 million or whatever it is,” Ingram says. “At the end of the year, you’ll have gotten within 1 percent of $6 million because, if people don’t pay their property taxes, you go out and nail a poster on their front door…your ability to predict property tax revenues is very high.”
Robyn says a jurisdiction’s existing property tax rate often affects homeowners’ acceptance of the measure.
“If they’re not already fed up with the property tax and they recognize [the municipality] is truly needing more revenue, they may be more willing to pay,” he says. “In New Jersey, people really hate the property tax, and they think it’s messed up and way too high.”
Homeowners’ satisfaction with services also is an important component.
Cutting staff or salaries is the main alternative city governments have to raising taxes. In addition to raising property taxes to help plug Santa Fe’s $8 million budget shortfall, Coss also is proposing cutting some employee benefits.
International Association of Assessing Officers Director of Publications and Marketing Chris Bennett tells SFR that, nationally, local governments’ approaches to budget shortfalls are “a complete mix” of tax-raising and expense-cutting measures.
City Councilor Matthew Ortiz was not one of the four City Council members who co-sponsored Coss’ resolution. Ortiz plans to introduce an alternative plan at the next city Finance Committee meeting.
“[Coss] is just basically asking the public to fund the shortfall that’s been created without requiring any cuts to 80 percent of our personnel costs,” Ortiz says. “That to me is unacceptable.”