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County to hold required hearing on low-income tax rebate

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In compliance with state law, the Chaves County Board of Commissioners will hold a public hearing Thursday morning to consider what the county manager characterizes as an “odd” and “convoluted” property tax issue.

According to a New Mexico statute passed in 1994, all counties must hold a public hearing in January of every odd year to determine whether public interest exists in establishing a tax rebate for low-income property owners in the county.

If members of the public are interested in such a rebate, the Board of Commissioners then would decide whether to draft an ordinance to institute the rebate, which would be the subject of another public hearing and commission vote.

“It has been years since anybody even showed up to ask about it,” said County Manager Stanton Riggs, “and I’ve had commissioners ask, ‘Then why do we have to have a hearing?’ And I say, ‘Because the law requires us to.’”

Riggs said the county administration is opposed to the tax rebate for several reasons, including that it is “just so convoluted and would be very hard to implement it and be fair.”

If an ordinance were adopted to permit the tax rebate, low-income property owners would not have to pay a portion of their property tax, with the percentage rebate depending on income. Instead, the county would pay those taxes on the residents’ behalf because, as Riggs explained, the county does not have legal authority to waive taxes owed school districts, university districts, soil and water conservation districts and other taxing entities or that are due because of voter-approved bond levies.

Riggs also described other reasons for not favoring the rebate.

“It is based on your income tax, and you can manipulate your income tax,” said Riggs about the rebate. “And, in the past, we have had people who manipulated income tax and appeared to be indigent when they had large amounts of money in other holdings. That’s the first thing. The second thing that is difficult is the tax itself. The tax is not really forgiven, the tax is just shifted (to the county).”

He said that raises another legal issue about whether public funds can be used to pay some people’s taxes, given that New Mexico has an anti-donation law barring public monies going to individuals. The county would pay the low-income residents’ taxes unless voters approved a special 1 mill levy to cover those taxes.

Riggs said he thought the law was established to help people in counties where extremely wealthy people or groups were buying property and building large homes, causing property values to spike.

He said a few times in the past, some Chaves County residents came to hearings to inquire about the rebate but nobody pushed for it when realizing all that it would entail.

According to the New Mexico Department of Taxation and Revenue Department, people who file tax returns showing income of $0 to $24,000 a year and who are not considered dependents of others can qualify for the rebate on their principal residences if counties adopt ordinances to allow them. Certain other conditions also apply. The department’s website indicates that the special property tax rebate is currently in place in Los Alamos and Santa Fe counties.

The public hearing is scheduled for 9 a.m. Thursday at the Chaves County Administrative Center, 1 St. Mary’s Place.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 311, or at reporter02@rdrnews.com.