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F I S C A L I M P A C T R E P O R T
SPONSOR Stewart
DATE TYPED 02/04/05 HB HJR 12
SHORT TITLE Statewide Millage Rate for Schools, CA
SB
ANALYST Ford
REVENUE
Estimated Revenue
Subsequent
Years Impact
Recurring
or Non-Rec
Fund
Affected
FY05
FY06
See Narrative
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Public Education Department (PED)
Taxation and Revenue Department (TRD)
SUMMARY
Synopsis of Bill
House Joint Resolution 12 proposes to amend the state constitution to increase the maximum
limit of mills that can be levied on property without a special election, and to impose the first 2
mills statewide with the revenue dedicated to public school funding. The proposed constitutional
amendment is subject to approval by the voters.
Significant Issues
Currently, the total maximum property tax levy for operating purposes is $20.00 per $1,000 of
net taxable value. If approved by the voters, the proposed constitutional amendment would raise
the property tax levy limit from $20.00 to $22.00. An increase of $2.00 will be imposed state-
wide and will be deposited in the state’s public school fund and distributed as provided by law.
According to PED, current law provides for the Public School Fund distribution to schools in the
following parts:
•
state equalization guarantee distribution
pg_0002
House Joint Resolution 12 -- Page 2
•
transportation distribution
•
supplemental distributions
•
out-of-state tuition
•
emergency and
•
program enrichment.
FISCAL IMPLICATIONS
According to TRD, the additional two mills will generate approximately $70 million for the pub-
lic school fund. TRD writes,
“Statewide net taxable value is currently approximately $34.9 bil-
lion. The property tax system currently provides schools with approximately $287 million in
revenues annually. Hence voter approval of the proposed amendment would increase property
tax revenues flowing to schools by about one-third. Additional revenues would most likely begin
flowing to schools in the tax year following voter approval in the 2006 election. That would be
property tax year 2007, with collections beginning in the Fall of 2007.”
OTHER SUBSTANTIVE ISSUES
TRD raises a technical issue with the language of House Joint Resolution 12:
“It is unclear from the language of the proposed amendment whether the yield control statutes would
apply to the new 2-mill levy. The proposed amendment departs from the traditional method of im-
posing property tax levies in New Mexico. The New Mexico constitution currently states simply that
20 mills may be authorized without voter approval. Section 7-37-7 NMSA 1978 then distributes
11.85 of the 20 mills to counties, 7.65 to municipalities, and .5 mills to school districts to be used for
operating purposes. Section 7-37-7.1 subjects all of these impositions to the yield control formula.
Since the proposed amendment imposes the levy directly, the yield control statute would not apply
unless Section 7-37-7 were amended to incorporate reference to the new levy.”
According to TRD, the yield control statute was development to prevent government entities from receiv-
ing windfall revenues in response to reassessment. The formula has the effect of lowering the actual
property tax operating rates. TRD provides the following county information:
Actual (ie. "Yield Controlled") and Imposed County
Property Tax Operating Rates, 2004 Tax Year
Rate
Actual Operating Rates**
County Imposed Residential Nonresidential
Bernalillo 11.850
7.031
11.600
Catron 10.850 10.850
7.706
Chaves 10.350
6.856
10.307
Cibola 11.850
7.656
11.618
Colfax 10.350
5.298
8.722
Curry 9.850
9.850
9.850
DeBaca 11.850 11.850
11.850
Dona Ana 11.850
7.891
11.850
Eddy 7.500
6.448
7.500
Grant 11.850
6.377
11.850
Guadalupe 11.850
7.417
11.850
Harding 10.850
7.830
10.850
pg_0003
House Joint Resolution 12 -- Page 3
Hidalgo 11.850 10.999
11.850
Lea 8.600
8.814
10.600
Lincoln 11.600
7.676
8.850
Los Alamos 8.850
4.356
6.615
Luna 11.850
8.343
11.850
McKinley 11.850
5.215
11.850
Mora 11.850
6.414
11.850
Otero 11.850
7.190
11.850
Quay 11.850
5.358
10.350
Rio Arriba 11.850
4.034
8.569
Roosevelt 8.850
5.650
8.850
San Juan 8.500
6.161
8.000
San Miguel 11.850
5.212
11.850
Sandoval 10.350
5.393
9.287
Santa Fe 11.850
4.617
9.861
Sierra 11.850
8.161
11.850
Socorro 11.850
7.356
11.071
Taos 11.850
5.168
11.050
Torrance 11.850 11.396
11.850
Union 9.150
6.505
9.150
Valencia 11.850
6.087
11.850
*11.85 mill maximum allowed by statute less the imposed rate.
**imposed rate after application of the yield control limitation
required by statute.
EF/lg