NM constitutional amendments would expand property tax exemptions for veterans — at a cost

SANTA FE — New Mexico voters will decide the fates of two proposals that would expand property tax exemptions for veterans who own homes in the state — and likely mean increased tax rates for other homeowners.

The proposals are among four constitutional amendments appearing on this year’s general election ballot after being approved by the Legislature.

House Minority Whip Alan Martinez, R-Bernalillo, who was one of the sponsors of both veteran-related measures, said the proposals could make New Mexico a more attractive place to veterans.

Already, the state has one of the nation’s highest percentage of residents who served in the military, with nearly 150,000 veterans, according to the U.S. Department of Veterans Affairs.

That figure includes Joe Pacheco, a 76-year-old disabled Vietnam War veteran from Mora County, who described the property tax exemption as crucial for his family and many other veterans.

“I would support that 100%,” Pacheco said of the proposed expansion.

Meanwhile, Martinez described the increased property tax bills some homeowners could face if the proposals are approved as a fair trade-off, saying, “If I have to pay $20 a year more in property taxes, it’s worth it to me to live in a free country.”

However, Bernalillo County Assessor Damian Lara expressed concern about the potential impact on elderly homeowners who live on fixed incomes and are not veterans.

He said the mill levy — or assessed property tax rate — would likely increase by between $50 and $100 annually for homeowners who don’t qualify for the veteran’s exemption if both proposed amendments are approved.

The current mill rate for Bernalillo County resident taxpayers is $1,608.67 per $100,000 of assessed value.

While most New Mexicans support helping veterans, Lara said the titles of the constitutional amendments do not reflect their property tax implications for non-veterans.

“They don’t say it’s their neighbors ... or everybody else who are paying for the tax savings for them,” he told the Journal.

One of the two veteran-related proposals, Constitutional Amendment 1, would extend a property tax exemption that’s currently available to 100% disabled veterans and their widowed spouses to partially disabled veterans.

The amount of the exemption would be equal to the percentage of a veteran’s disability rating, which is determined by the federal government.

For example, veterans who are deemed to be 40% disabled would get a 40% break on their property tax bill.

The other veteran-related proposal, Constitutional Amendment 2, would increase a property tax exemption that all veterans can claim from $4,000 to $10,000. That amount could also increase in future years, depending on inflation.

Statewide, about 7,000 homeowners qualified for the property tax exemption for fully disabled veterans or their surviving spouses as of 2020, Lara said.

Extending the exemption to partially disabled veterans would mean roughly 29,400 individuals could qualify, according to a legislative analysis.

The average annual cost savings for those homeowners would be $767, the analysis found.

While Bernalillo County and other more populous counties could likely absorb the decrease in revenue by adjusting tax rates for other homeowners, about two-thirds of the state’s counties could see a revenue hit since they already have the highest allowable mill rate in place, said Lara, who is the chairman of the New Mexico Counties Assessors Affiliate.

Both veterans-related changes to the state Constitution were approved by lawmakers during the 2023 legislative session without a single “no” vote.

Martinez, who previously worked as a deputy secretary of the New Mexico Department of Veterans Services, said many veterans are business owners who often hire fellow veterans.

He also said the proposed tax changes would benefit veterans who are partially disabled but currently don’t qualify for the full property tax exemption.

“This will just afford those veterans who are disabled because of their service to this country to receive a little bigger property tax exemption,” Martinez said.

Absentee and limited early voting are already underway for the Nov. 5 election, with expanded early voting set to begin Oct. 19.