Under fire over ‘distorted’ property values, Assessor Domingo Martinez defends system overhaul

Assessor Domingo Martinez has made tremendous improvements in the Santa Fe County Assessors Office since he took over in 2007, but property valuations in the county continue to be “distorted,” according to state evaluators.

“It is commonly known and observed that a significant percentage of the residential properties in Santa Fe County are undervalued,” according to a state Property Tax Division evaluation released last week.

Martinez agrees with that assessment, but maintains that he is doing is best to remedy that and many other problems he inherited from previous administrations.

“It has been very laboring and difficult to correct decades of erroneous and manipulated data that was never questioned by anyone in the past,” Martinez wrote in the portion of the report that calls for his comments.

Martinez has taken a cleaning-house approach to the office since he was elected. One of the first things the former state auditor set about correcting was the method the state uses to evaluate the 33 county assessors in New Mexico.

Santa Fe County’s inconsistent values could have been remedied earlier, Martinez said, if state evaluators had checked the data provided to them by his predecessor Benito Martinez (no relation), instead of taking the former assessor’s answers to important questions about the functioning of the office at face value.

“We really took that to heart,” said Deputy Property Tax Division Director Michael O’Melia. The Property Tax Division has since made its evaluation — which formerly took the form of a questionnaire filled out by the assessor whose office was being evaluated — more stringent.

What used to take half a day, New Mexico Taxation and Revenue Secretary Rick Homans said, now takes three days. And state inspectors pull and audit samples of property records. “He did play a serious role in revising the evaluation process,” Homans said.

Part of Martinez’s reformation program also has been raising valuations on thousands of properties which had previously been under or unappraised. That has not made him popular with county officials, who are concerned about constituent complaints and the costs associated with the approximately 1,100 valuation protests filed by county taxpayers last year. For comparison, residents filed about 490 protests in 2004.

Of those 1,100 appeals, Martinez estimates the county won about half the cases. About 70 protesters decided to forgo hearings before the state Protest Board and take their cases directly to District Court. All of those cases are still pending, and the Assessor’s Office recently asked the County Commission for about $50,000 for related legal fees.

But Martinez continues to maintain that he is doing what he was elected to do: Spread the tax burden fairly among all the county’s property owners.

Data from the state on sales ratios — a statistical measure of how equitably properties are being taxed — backs this up.

For example, Martinez’s office scored a 100.76 in the Price Related Differential category — the statistic is used for measuring tax burdens between high- and low-value properties and shows the office is looking at all types of property equally. The recommended range for that score is between .98 and 1.03.

When County Commissioner Harry Montoya mentioned during a commission meeting last month that he’d had calls from constituents in his district complaining that their values had increased even in the softening real-estate market, Martinez came upstairs from his office and took the podium to address the issue.

“In your district, the property values had not gone up in 14 years,” Martinez told Montoya. Martinez told The New Mexican he didn’t know why that particular part of the county hadn’t been assessed in so long.

Martinez also said overall property values in Santa Fe County have defied the national trend and remained fairly stable.

“The vast majority of properties have not gone down in Santa Fe,” Martinez said. “Some have, and we have those pockets identified; and some valuations have come down. But the majority have gone up or stayed the same.”

The value of taxable property in the county has increased from about $4.2 billion in 2004 to $6.4 billion in 2008.

State-mandated limits on the percentage a property can increase in value each year also skew the public’s perception of what is fair, Martinez said. Because those caps have kept values artificially low, the assessor said, most properties are so far below market value that market fluctuations don’t affect them.

Those caps — which prevent nonvacant residential property from increasing more than 3 percent each year — mean properties that were overlooked in previous assessments will always be valued far below market — unless the law is changed or the property transfers.

O’Melia said changes in state checks designed to measure the effect of the caps are being put in place.

Commissioner Liz Stefanics said she thinks the public needs more information about the factors that affect property values.

“We need to let them know that we are not raising their taxes arbitrarily,” Stefanics said. “We are following the law.”

Martinez said a plan is in the works to provide meetings and literature to help educate residents on how property taxes work.

In the meantime, Martinez said, he is continuing to try to reform the office.

The implementation of a new, computer-aided mass-appraisal system — which required the digitization of about 86,000 paper property cards — is nearly complete. And Martinez recently convinced the county commission to fund five new positions in his department.

Martinez said he plans to begin wholesale reappraisal of the county beginning in 2011, sending his appraisers to physically inspect every property in the county.

Martinez said he thinks he can clean up Santa Fe County’s tax rolls in three or four years. But in order to do that, he’ll need to get re-elected.

But Martinez said his approach to bringing county property values to current and correct — something he has not been able to accomplish yet — has not made him popular with some taxpayers.

“We paid the price for it,” he said. “We had people coming unglued on us. We had a little old lady come in here and tell me ‘I want this lowered.’ I said ‘It’s against the law I can’t do it.’ She said ‘When do you run?’ I said 2010. She said ‘I’m going to remember you, and I have a big family.’ ”

Still, Martinez said, he feels he has a good chance at getting elected again.

“I think the majority of people believe we are doing a good job,” he said. “They are tired of seeing certain individuals get away with it and they don’t want any special circumstances for them — they just want the special circumstances down the road of paying what they should, based on their value.”

Though Martinez has another year left in his term, at least one person already is eyeing his job.

Former County Commissioner Paul Duran — who has toyed with the idea of campaigning for several elected offices since being termed out of the commission in 2004 — said Thursday he plans to seek the position when election time comes around. The job pays $65,000 to $68,500 per year, depending on the qualifications of the candidate.

“I’d like to take a stab at it,” the real-estate agent said. “I think it would be interesting. It would be fun, and I think I have a lot to contribute, living here all my life and being in the real-estate industry for 30-plus years. I think I have a pretty good handle on property.”

WHAT PROPERTY OWNERS MUST KNOW

Property owners in Santa Fe County who are not paying taxes on new homes, buildings or improvements have until the end of the year to report the oversight without facing possible prosecution.

Assessor Domingo Martinez said taxpayers are legally responsible for reporting new buildings or improvements so they can be considered in valuation of effected parcels.

Those who self render (as state law requires) before Jan. 1, 2010, could still face possible penalties, he said. But those who don’t and are later discovered during a countywide sweep Martinez plans to conduct in 2011 will have their names turned over to the District Attorney for possible prosecution.

State statute allows for fines up to $5,000 and prison time of up to 18 months for failure to report property-tax liability.

For more information, call the Santa Fe County Assessor at 986-6300.