Tax exemptions for veterans on ballot

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 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.

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."

Curry County Assessor Sam Kelley said the owner of a $200,000 home who doesn’t qualify for the veterans’ exemption would pay about $68 per year more in taxes. That’s if both proposed amendments are approved.

Bernalillo County Assessor Damian Lara said the mill levy — or assessed property tax rate — would likely increase by between $50 and $100 annually in that county.

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.

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.

The New Mexico Legislative Council Service compiled a summary of the proposals, including pros and cons for voter approval.

Among the cons:

• “An increase in this property tax exemption will shift the tax burden, and the tax bills of all other New Mexico property owners will increase.”

• “Exemption may benefit those who do not need financial assistance. The exemption may be too broad in application since it would apply to any veteran who has been determined to have a permanent service-connected disability, regardless of financial status. If the purpose is to relieve the financial burden on those who are unable, due to their disability, to pay property taxes, then the exemption should target those with limited incomes.”

• “There are other social programs that disabled veterans may access to assist with living expenses. For instance, there are numerous state, federal and nonprofit programs that serve veterans. The policy for this resolution may rely on a perceived need that does not reflect the availability of these resources.”

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