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F I S C A L I M P A C T R E P O R T

SPONSOR Payne

ORIGINAL DATE

LAST UPDATED

2/2/08

HB

SHORT TITLE Head of Family Property Tax Exemption, CA

SJR 11

ANALYST Francis

REVENUE (dollars in thousands)

Estimated Revenue

Recurring

or Non-Rec

Fund

Affected

FY08

FY09

FY10

*See Narrative

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to several bills – See table below

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Joint Resolution 11 proposes to amend the NM Constitution to change the amount of

property value exempted for heads of family from $2,000 to $20,000. All changes to the consti-

tution including SJR11 must be submitted to the people for a vote at the next general election.

FISCAL IMPLICATIONS

The intent of SJR11 is to give families relief on their property taxes by significantly increasing

the head of household exemption to $20,000. 258,792 taxpayers qualified for the exemption in

2005 for a total exemption of $517.6 million. The need to maintain a level of funding for debt

service and operational income, particularly for counties, means that rates will adjust upwards

for all taxpayers. Lowering the valuation of property also affects the amount available for capital

outlay for the state and local governments including school districts.

A taxpayer who qualifies for the head of family exemption would, outside of any upward rate

revision, see a reduced tax bill of approximately $170 annually.

SIGNIFICANT ISSUES

County government and school districts rely primarily on property tax revenues for operations

and general obligation capital funding.

Senate Joint Resolution 11 – Page

2

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

There are several property tax proposals being considered in the 2008 session:

Bill Number

Title

Description

H229

END YIELD CONTROL ON SCHOOL MILL LEVY

Allow school districts to levy posted tax rate

H264

RESIDENTIAL PROPERTY TRANSFER AFFIDAVITS Allow affidavits about property value to be used for county

protests

H276/SB398

SUNCAL TAX INCREMENT PROJECT BONDS

10 percent diversion of Bernalillo County property taxes to

tax increment district

H295/SB355/SB116 RAISE PROPERTY TAX LIMITATION INCOME LIMIT Raise the income threshold for taxpayers over age 65

H324

CHARITABLE CARE PROPERTY TAX VALUATION

Exempt certain nursing homes from valuation

H388

REQUIRE DISCLOSURE OF REAL PROPERTY TAXES Disclosure of estimated property tax to home buyers

H617

PROPERTY TAX ON COMMUNICATIONS SYSTEM LAND Expand the definition of communication system land in

exemption

HJR1

NATIONAL GUARD VETERAN PROPERTY TAXES, CA Include national guard veterans in military veteran

HJR4

SENIOR CITIZEN PROPERTY TAX EXEMPTION, CA Phase out property tax for seniors

HJR6

VETERANS' ORGANIZATION PROPERTY TAXES, CA Exempt certain property from valuation

HJR10

STATEWIDE MILLAGE RATE FOR SCHOOL FUNDS, CA Add additional 5 mills for education on statewide property

tax

S449

LOW-INCOME PROPERTY TAX REBATE ELIGIBILITY Expand income th reshold fo r local govern metn low

income property tax rebate

S450

PROPERTY TAX VALUATION & REASSESSMENT

Revalue property that transferred in 2005/2006 to 2004

levels

S483

PROPERTY TAX ADMINISTRATIVE FEE THRESHOLD Raise minimum amount of tax admin fee plus tax to $15

S516

PROPERTY TAX DELINQUENCY NOTICES & TIMING Extends the time limit property tax can be delinquent

before sold.

SJR11

HEAD OF FAMILY PROPERTY TAX EXEMPTION, CA Increases head of family exemption to $20,000 from

SJR14

PROPERTY TAX LIMITATIONS, CA

Imposes maximum total tax levy of no more than 1 percent

of current and correct tax value.

POSSIBLE QUESTIONS

What impact will this have on local government financing options.

NF/mt