By Mary Alice Murphy
The Grant County Commission special meeting took place on Thursday, Jan. 28, 2021, to address a single issue on the agenda, which the state of New Mexico requires every commission to consider every two years in January of odd-numbered years. A decision must be made in January, which is why the special meeting was called. A considerable amount of discussion had already gone on during the regular meeting on Jan. 14, and can be read at https://www.grantcountybeat.com/news/news-articles/62360-grant-county-commissioners-january-2021-work-session-and-regular-meeting-part-5
The agenda item required a public hearing and discussion regarding Ordinance O-21-01 entitled "An Ordinance Authoring a Tax Rebate to Benefit Low-Income Property Taxpayers for Taxable Years 2021-2022."
One person had signed up to give testimony during the public hearing through Zoom. Frances Gonzales said: "Because of COVID a lot of people who own property are struggling." She noted that many had lost jobs and were having to decide whether to buy food or pay bills. She appreciated that the commissioners were considering the ordinance "A lot haven't been able to catch up. As a member of the Mining District, I want to thank you for considering this ordinance."
District 1 Commissioner and Chairman Chris Ponce thanked Gonzales for her comments and closed the public hearing.
District 3 Commissioner Alicia Edwards asked if a person was on Zoom, even if they could no longer participate in the meeting, "could they stay on and hear what we have to say?" The answer was yes.
District 5 Commissioner Harry Browne made the motion to approve the ordinance, and for discussion purposes, Edwards seconded it, to consider the proposed ordinance.
District 2 Commissioner Javier "Harvey" Salas asked for a reminder of what the thresholds were to qualify for the rebate.
County Manager Charlene Webb said: "Their modified gross income has to be $24,000 or less."
Salas also asked if "we have any idea of the percentage of our taxpayers who might qualify?"
Webb said: "No. What I did was I pulled the census statistics quick fact sheet. If we went by those statistics, they show that 18 percent of the population in Grant County lives in poverty I suspect that it may be higher now due to economic conditions."
Edwards said she did "a ton of research, because personally I would really like us to find a way to do this. But I am reluctant without knowing how much this might cost. I determined that 3,891 households in Grant County make less than $25,000 out of the 12,586 households in Grant County. That is 31 percent of Grant County households that have an income of less than $25,000. Even if we don't do anything, that needs to be recognized. We have a large number of seniors in our community, too. Nearly 1,000 of them make under $10,000 a year. I talked to Matthew (James, deputy assessor) yesterday and he explained the mechanics of the way the rebate works it that it is based on your PIT (state New Mexico tax return). He said that other exemptions are opt-in or opt-out, but this one is automatic. The state would send us the bill for the amount and the state would send the rebate to those who qualify. The assessor's office has no way to know the connection between the property tax and the person's income. The Tax Division of the Department of Tax and Revenue would run a report. So, there is no way to figure this out through the assessor's office."
Ponce noted that income could vary from year to year.
Edwards said they were looking at home ownership rates in the population. "I think a number of those owning homes would be seniors, who are on fixed incomes."
Ponce said: "As of right now, it was hard for us to come up with a budget for this year because of the unknowns. What will it be like next year?
Webb said what she found most helpful was getting information from Santa Fe County, which has the ordinance in place. "The first year of the ordinance, the cost was about $300,000 and then it increased every year by about $100,000. It went down at one point, but last year the bill was $600,000, with 1400-1600 taxpayers using the rebate. It's impossible to know who it is because it's all confidential. The state would just send us a bill, and we must pay it immediately or they could encumber any other funding that might be coming in. It's like writing a blank check and holding it until we get the bill. Copper production is dropping. The Legislature is looking at more property tax exemptions for others such as veterans. I would urge you not to consider passing this right now. I don't know what we could cut to pay for it."
Browne refuted what Edwards had said that the deputy assessor had told her. "I don't think it happens automatically. I think it's a separate form to opt-in, then it's automatically determined. I think that's why Santa Fe's numbers grew, as more people found out about it. My more important point is that I've given up on the idea that we can calculate how much it will cost. I support this ordinance because it's the right thing to do. I would like to encourage home ownership. The middle class is disappearing, and they are the ones who buy homes. This ordinance makes it easier to own a home. And second, people in these income brackets need help right now. It's not a huge amount of money for a family at $350 a year, but it could help. I think it's a limited risk, because in two years, if we know we cannot afford it, we can change it. What loss of income, what holding amount at what level could you tolerate?"
Edwards said a further question would be: "Where would we take this out of the budget? I support it, but at some level we will have to justify where to take it out of our budget. We don't ever have anything extra. It's always about prioritizing. We do have contingencies for projects and then we have less flexibility. The other dilemma for me is I agree with Browne. I've been working for many years with lots of people that would benefit from it. Like many things that happen in New Mexico, this is a well-intentioned thing with many unknowns. Is there a better way to help people with this $350?"
Ponce said he agrees with helping people. "This is one of the hardest things I have to vote on. If we can help residents, I want to help, but the other part of me as a commissioner, where are we going to pull it out of? We have contract negotiations coming up. We have to think about the services we offer. We're not out of the woods yet on our potential funding. What will we have to sacrifice to help some and maybe hurt others? As I've said before, we don't have a crystal ball."
Salas said he doesn't think any one of the commissioners doesn't want to do this, but "would we have to rob Peter to pay Paul? The money has to come from somewhere. Can we do it some other way to structure the assistance or is this the only way the state allows us to provide such assistance?"
Ponce said he thinks it is basically the only way.
"It doesn't have to be just this one," Salas said.
Webb said: "It is this or not. A group of county managers tried to get some other tables for this other than just this one. We wanted to phase things, but it was shot down by legislators from Albuquerque and Santa Fe. Legally, I do not know of any other mechanism that wouldn't run into the anti-donation issue."
Edwards said 161 county residents are participating in valuation freezes for those over 65 years of age. "Could we open that up?"
Webb said: "No, because it's set by statute."
Ponce noted that about 250 are eligible. Browne said 256, according to Assessor Raul Turrieta.
Salas said: "Not only are there layoffs at the mine, but a lot of contractors will also be affected. Copper revenue is going down. If we can figure out where to get the money, I would be more than happy to approve it."
Browne said: "I understand where it could come from and how much we could bear. We thank Randy Hernandez all the time for cutting the indigent claims down to an affordable amount. My recollection is we used to exceed the amount received in the indigent gross receipts tax increment. There must have been funds freed up."
Webb said a lot of the indigent fund paid for inmate health care. "When costs were over what we had, we had to subsidize it with general fund money. The state mandates that the indigent health care fund can pay only for indigent health care."
Browne said he thinks that the cost would be about $50,000 to $100,000. "It's an amount we've dealt with before having to find somewhere."
Edwards said $100,000 was something she would be willing to do. "However, I want us to be in control of it. I recognize that may be not possible. I would support a county ordinance that would support this with no state statute attached. I don't trust the state on this stuff. If we were looking at a budget then we could decide we could do it, but this ordinance locks it in."
District 4 Commissioner Billy Billings asked if the assessor supports this ordinance. Browne said Turrieta and Edwards said James do not support this because "we cannot budget it."
Webb said it would be impossible for the county to do such an ordinance on its own. It would conflict with too many state statutes.
Browne said he remembered that one of the first questions he asked was whether property tax could be scaled to income and was told a resounding no.
Salas said he would prefer creating "our own ordinance. I'm sure we could find the money if we instituted this, but it would take a couple of years for people to learn about it. Can we cut 2 percent off every department's budget or take a look at our investment and dedicate a portion or would it be possible to create a GRT increment for this, even though our GRT is already high? I would like to look at all the possibilities."
Ponce said there was a lot to consider. "What are we willing to do without? I would love to do this, but it's also what we have to do, which is provide services to our residents and continuing to put money into economic development. With fewer miners, our revenue will go down."
Billings said: "We have to think about it when we do the budget. I wish the state would be more flexible and maybe we could start with seniors and then phase it in."
Browne said the commissioners had not yet gotten the first half of the fiscal year report. "I disagreed on the thought of furloughs. The way I've been tracking revenues, I think we're doing well."
Webb confirmed that the first half revenues have come in better "than we anticipated, so we are not looking at furloughs. We hope the second half is as stable."
"I was right," Browne said, "so, I'm asking you to trust me again. I believe we will have the resources for this. It's a relatively small portion of a $13 million-budget. Could we see if we could find leverage from the Community Foundation or somewhere if we don't exceed $100,000?"
Ponce said: "We want it, but we can't get to the steps where we do it. We knew this comes up every two years. This is what the work sessions are for to see if we can do an ordinance like this and fit it into the budget. Can we discuss it next month?"
Webb said it, by statute, has to be considered in January of every odd-numbered year and it must be approved or not in January. "I'm nearly 100 percent confident we cannot do any other ordinance, I'm thinking, because of anti-donation and other state statutes."
Edwards said she has been raising money for non-profits in the community for about 15 years. "If we try to use other sources, it is robbing Peter to pay Paul, because these non-profits are helping the same people."
The vote came out with Browne and Edwards voting aye and Ponce, Salas and Billings voting nay, so the motion failed.
Next came commissioner reports.
Billings said he had looked up statistics. "What the county manager said about our poverty rate in Grant County is 18 percent. In Santa Fe, it's 12 percent and in Los Alamos 3 percent. Maybe we should be looking to put more into economic development to lessen the poverty rate."
Salas said: "I feel horrible, because I know many would benefit from it. I should have done a better job with my homework."
Edwards said she thought it was a good discussion and "I appreciate everyone's perspective. What else could we do? Let's think outside the box to get people who need this the $350 a year. How do we do it and not be stuck on the state?"
Webb said: "You need to work with the legislators to end some legislation so that you might be allowed to do it."
Edwards said: "Let's get on it." She then talked about an article in Politico from a Eugene Ludwig who does research on unemployment, which he believes is underreported. He works through TRU Labor Statistics. He looks at the underemployed, the unemployed and those who work, but don't earn enough to support themselves. He rates unemployment at about 25 percent. "There's a bill in the Legislature HB4 looking at qualified immunity. Have a look at it and the implications of it in every direction. Look at it as an impact on the county. We need to look at reforming things it tries to address."
[Editor's Note: An article on a definition of qualified immunity can be found at https://www.law.cornell.edu/wex/qualified_immunity ]
Edwards continued: "In New Mexico, we have some really terribly written legislation. I think the intent was good, but it is so terribly written that it is hard to get to the intent. This ordinance is a classic example. If it allowed more flexibility, we could do it."
Browne thanked everyone "for a difficult and respectful discussion."
Ponce agreed that it was a hard decision. "I don't know if I'll be here tomorrow, much less two years from now. Our biggest responsibility is out budget. If, in our hearts, we want to do this, maybe we can put in a line item for this effort and consider how much we can put in for this coming year and how much in the next budget year, then maybe we can consider it in two years. I also hope the assessor's office continues to promote exemptions, so more people know about them."
The meeting adjourned.