Truth or Consequences voters, November 2022, overwhelmingly approved (by more than 80 percent) the ballot measure that the city issue $3 million in general obligation bonds.
The money is to be spent on water and wastewater and road projects.
Property owners will start paying for the G.O. bond debt this year, although they should have started paying it last year. An undefined government glitch prevented the tax from starting, and now property owners’ tax rate will be to pay off last year’s and this year’s G.O. bond debt.
Tax bills for the first half of the year go out in November and the second half in March.
T or C property taxes used to be one line item (among many state, county, school district and special taxing districts line items) on the bill. That line item was for city operations and the money went into the general fund.
Now owners’ will see a second line item for “debt.”
Non-residential owners will pay about $2.13 per $1,000 net property value into the city’s general fund for operations.
An explanation of “net property value.” State law dictates only one-third of the total value of a property will be taxed. That one-third is the net property value. A $300,000 total value will have a $100,000 net value.
A non-residential owner will pay $213 into the city’s general fund for operations on a net property value of $100,000.
The non-residential owner will now pay a second line-item tax to the city for debt. The debt tax is 4.535 mills or nearly $4.54 per $1,000 net property value. The owner with a net property value of $100,000 will pay about $454.000 for city debt on the $3 million G.O. bond.
The residential owner will pay 1.474 mills per $1,000 net property value for city operations. A house with a net value of $100,000, will pay $147.40 into the city’s general fund for operations.
In addition, the residential owner will pay a new city debt tax of 4.535 mills, the same rate as the non-residential owners’ debt tax. A house with a net value of $100,000 will pay $453.50 to the city to pay off debt.
T or C City Manager Angela Gonzales announced the new property debt tax rate at the Sept. 11 city commission meeting.
The debt tax rate will be high this year because it was not collected last year and now two years’ worth of debt is due. Gonzales, like a mensch, said that although it’s far from clear who is to blame, she is taking responsibility for the lack of tax money being collected last year.
The total debt payment due to the New Mexico Finance Authority for 2023 and 2024 is $545,215, Gonzales said.
NMFA is not only handling the issuance of about $750,000 in bonds each year for four years, it is also buying up all the bonds. The total debt owed to NMFA over the 20-year life of the bonds is about $4.2 million.
The city issued no bonds last year, but still has to pay NMFA the agreed yearly fee.
In order to realize $545,215 in revenue, each property owner must pay 4.535 mills debt tax. Next year property owners will pay a lower debt tax rate, since only one annual payment will be owed to NMFA.
For more information on the G.O. bonds, see two prior articles:
https://sierracountycitizen.org/citys-general-obligation-bond-fails-to-launch/
The city will soon advertise in the Sentinel, warning the people about their increased property tax. A flyer with the same material will be enclosed in the tax bill. Please note that the flyer, below, states that a $100,000 total property value will pay about $140 more. The net property value would be about $33,000. 33,000 x 4.535 mills = $149.49.