There will be a minimal decrease in property taxes if the bonds are not approved by voters. The tax rate will go down until the current general obligation bonds are paid off.
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A General Obligation Bond is a form of debt financing secured by property tax revenues. General obligation bonds can be issued for general purpose projects. State Statute 3-30-5 outlines the authority to issue general obligation bonds and purpose.
City of Las Cruces current general obligation bond outstanding debt is $22,510,000.
State Constitution Article 9 Section 3 limits the amount of general obligation bonds issued by municipalities to 4% of total assessed valuation. The City of Las Cruces’ current general obligation bonding capacity is $82,681,309.
The City uses property tax revenues to pay for general obligation bonds. General obligation bond debt service is paid semi-annually (February and August). City's outstanding general obligation bonds are on a twelve-year repayment schedule.
Debt service refers to the cash required to pay back interest and principal on debt obligations. The amount of debt service is one factor used to calculate the mill rate.
Bond cycling allows the city to issue new debt without increasing the debt service. The debt service stays leveled when debt is cycled. If general obligation bonds are structured to be cycled every four years, the debt service will decrease the fourth year but will level out with the new debt.
The GO bond questions on the ballot will not raise the City’s debt service level which is one factor in calculating property taxes. If the property’s assessed value increases, property taxes may go up.
Several factors determine how much you pay in property taxes. These include assessed value and location of the property. An increase in the assessed taxable value of the property will increase the property taxes. If governmental and/or educational entities increase their mill rate, property taxes will increase.
Taxable value on real and personal property is one-third of the total assessed value, minus any allowable exemptions. Net taxable value times the mill rate is total taxes owed.
Note: The New Mexico Department of Finance and Administration may apply the yield control formula to limit the percentage by which total revenue generated by a property tax imposition may grow from year to year.
The assessed value is the dollar value assigned to a home or other piece of real estate for property tax purposes. The county assessor is responsible for valuing all real and personal property for taxing authorities in the county.
The mill rate is the amount of tax payable per dollar of the assessed value of a property. 1 mill is equal to $1 in property tax levied per $1,000 of the property’s assessed value. Different mill rates are charged by different agencies, including the city, the county, school boards, and the state. These are all combined to help calculate your final property tax bill. The current mill rate is 2.03. The mill rate will not increase with the GO bonds in the current ballot.
The New Mexico Department of Finance and Administration will determine the rate that each taxing entity will receive, also called Mill Rate. The portion of the taxes received by tax entities such as school districts and municipalities are based on their budgetary needs. Yield control rates place an additional limitation on property tax rates. Yield control rates limit the tax rate when property values are increased due to reassessment.
The mill rate established is applied to both existing and new property.
Many communities issue and repay GO Bonds on a regular cycle - e.g. every 2 to 6 years. The City will evaluate the need for GO Bond elections in the future.
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