City councilors halt real-estate tax idea again

Julie Ann Grimm | The New Mexican

10/10/2007 -

Santa Fe city councilors for the second time in two months stalled efforts to ask voters if they want to impose an excise tax on high-end real-estate sales.

Councilors voted 4-3 on Wednesday against holding a public hearing on whether to put the issue on the March municipal election ballot.

The proposal would levy a 1 percent fee on the amount of a property's sale price that exceeds $500,000. The sale of a home for $600,000, for example, would require payment of a $1,000 fee.

The revenue would be earmarked for various affordable-housing goals, including acquisition of land, city-employee housing and operation of rental units.

While the vote to stall the proposal has the same tally as a September vote, three councilors had different roles in Wednesday's vote.

Councilor Miguel Chavez voted against a hearing in September but changed his mind and voted in favor of the idea this week. Councilor Matthew Ortiz, who voted Wednesday against scheduling a hearing, was not present for the previous vote. Meanwhile, Councilor Rebecca Wurzburger, a supporter in September, was out of town Wednesday.

The renewed debate has been accompanied by an advertising campaign that raised the ire of some councilors. Ads funded by an ad hoc group backed by primarily by real-estate professionals decried what it dubbed "the home tax," charging it would adversely affect the prices of all housing.

Ads opposing the measure, in which models portrayed teachers, nurses and firefighters, were misleading and unfair, Councilor Chris Calvert said. "I do question what I call dirty tricks and borderline unethical behavior," said Calvert, who voted against the motion to deny the hearing.

The head of the city's firefighter union sent a strongly worded letter to councilors. Calvert read it at Wednesday's meeting, noting the ads did not have the support of those they claimed to represent.

"We applaud and encourage the efforts to make housing affordable for all of us," wrote David Jenkins, president of the Santa Fe Firefighter's Association.

While the vote didn't go the way he hoped, housing advocate Hank Hughes said after Wednesday's hearing that the fate of the idea is not sealed.

"It's disappointing that they didn't do the tax now, but I think it's very much on the table, and we are going to push for it at a different time," said Hughes, who serves on the regional Affordable Housing Roundtable and is director of the New Mexico Coalition to End Homelessness.

The city's housing trust fund is dwindling and needs a permanent, sustainable source of revenue to continue efforts to address housing needs here, said Kathy McCormick, director of the city Housing and Community Services Department.

What is needed, she said, is a more detailed plan for revenue sources to supplement that fund and specifics on how such revenue could be allocated.

Several councilors said the broad nature of a list of possible uses for the transfer-tax revenue was the reason they voted against holding a hearing, coupled with the idea that the tax debate would overshadow a plan to ask voters to approve a bond issue for park renovations — a measure that is likely headed for public hearing soon.

Mayor David Coss said he was in favor of having a hearing on the transfer tax, but under council rules, he votes only in case of a tie.

Councilor Patti Bushee said it was clear to her that a majority of the council was not on board with the plan, and it didn't make sense to go through the public hearing process.

"If you want to have a knock-down, drag-out, fine," she said. "But where is it going to get you?"

Councilor Karen Heldmeyer, co-sponsor of the new effort to get the tax on the ballot, said she still believes it makes sense for Santa Fe's increasingly expensive home market.

Councilor Ron Trujillo, who voted against a hearing, said he was open to hearing more about how such a tax would work. He said his primary concern is that it doesn't burden the lower and middle classes.

"It's not that I am against it," Trujillo said. "It's not like it is going to die; it can be resurrected."

The city clerk has said the council is scheduled to finalize ballot language
Nov. 14, although the official deadline for such action is not until December.

Also on the March ballot will be four council seats, the municipal judgeship and amendments to the city charter.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.