Tax and Rate Brouhaha

Paradoxes Confront Policymakers

TMS

From 1 to 4 pm on Monday, Sept. 20, the Taos Municipal Schools District Board will meet with advisors to discuss the impact of school bonds on property taxes. During the weekend, a number of volunteers, elected and appointed officials, including experts have been discussing ways to mitigate what amounts to “tax lightning,” due to the accelerated sale of $40 million in bonds.

It appears as if bonds were sold early to take advantage of decreased construction costs and financial opportunities by speeding up the process. Opportunities also arose to take advantage of federal “Build America Bonds,” which meant the board committed itself to upfront short-term expenses in order to save taxpayers money in the long run. In other words, in order to stretch bond money and get more bang for the buck, TMS has inadvertently impacted property taxes.

While taxpayers and tabloid journalists will be looking for scapegoats, the systemic complexities are only now being understood. Certainly, the promise not to raise taxes was made by supporters and the board of TMS. Historically, taxes have been comparatively low in Taos County and the schools have suffered from neglect. Taos Friction hopes that a TMS “White Paper” will clear the fog and be used as “a teaching moment” in terms of timing and unforeseen consequences.

One wishes that the experts and taxpayers were as interested in student achievement as they are in the costs of construction and property taxes.

KCEC

At a “Special meeting” on Thursday, KCEC Trustees voted to raise rates. According to CEO Luis Reyes, “The overall increase is 13 % with the residential increase being 8.65%, and Chevron 85%. The average low income user will see a range 0f –2.00 per month to + 2.00 per month. Also Bill, this is an electric rate increase and has no diversification revenues or expenses at all.” Reyes forwarded a PDF of a power point presentation that says system charges, now about $10 a month, will go up to about $20 per month for residence. (But businesses will pay higher monthly system charges, according to Horse Fly sources.) Trustees Virgil Martinez of Cerro and Luisa Mylet of Taos (Pot Creek), voted against the increase, according to activists, who attended the meeting.

Mr. Reyes took issue with our criticism of KCEC for doing business at “secret meetings” or “behind closed doors.” But the Special Meeting was held on Thursday, Sept. 16 and activists, including Robin Collier, only heard about the meeting, due to a leak. The press, public, and membership were not notified. Sources say KCEC’s regular meeting, scheduled for the last Tuesday of the month, has been moved to Thursday, Sept. 23—so that Trustees Toby Martinez (Taos), Ambrose Mascarenas (Penasco), Bobby Ortega (Questa), Luis himself et al can travel to Georgia for a conference on Broadband issues.

For interested parties, Collier has posted a complete recording of the meeting on the Cultural Energy web site. Also posted is the presentation slides as a pdf. Apparently members will be notified of the request for a rate increase at the PRC. Then members will have 20 days to respond and petition for a public hearing. Our friends at Cultural Energy have posted the audio for the Kit Carson Electric Coop rate increase.

Given the tax and spend climate created by Taos Politicos, KCEC activists will have no problem finding 25 signatures to force a public rate hearing at the PRC. We hope KCEC will explain to the public why millions of dollars in Propane and Internet losses don’t count in the rate increase, according to Reyes. Coop indebtedness has been increasingly affected during the last decade by forays into digital metering, solar generation, and expansion into Ojo Caliente and Penasco. Now the Coop has also engaged in a wildly expansive foray into Broadband service, which will add another $20 million to the debits on the balance sheet, which is already in excess of $60 million.

For years, Coop trustees have avoided raising rates or discussing issues of substance in public forums. They rely on Luis to fast-talk the public. Several of the trustees have misrepresented the condition of the Coop to the public over the years and they should resign. This member acknowledges that a rate increase may be necessary but he doesn’t like trustees who do the dance, give the CEO a big raise at the end of Aug. –then ask for a rate increase.

Town of Taos

According to our sources, the Town of Taos will hold a meeting during the second week of October to present a “plan” entailing reorganizing staff and regarding future plans to reduce costs. The Town wants taxpayers to approve .25 gross receipts tax to fund future services. Though the Town does not hold secret meetings like the Coop, the Council tried to slip this tax by without a popular referendum. Unlike the County and TMS, which successfully went to the voters for approval of a GRT for the Complex or extension of property taxes for School renovations, the Town used legalistic reasoning to avoid the citizenry.

But the citizens prevailed with a petition and now the Town must explain itself.

Taos County

A few years ago, voters approved a $32 million GRT bond for the complex. Commissioners weren’t satisfied with the amount. They used a lease with the State’s magistrate courts to borrow more money and then got more money from the Department of Agriculture (loan? Or grant?). Meanwhile, the County has made no provision for paying to operate the huge structure—estimated at around $45–$48 million now–for costs like heating, cooling, and detention guards.

Ramifications

Economists universally agree that job growth, construction, and income will be flat during the foreseeable future. Retail and real estate sales are in decline, which negatively affects GRT and property taxes in Taos. The public schools, due to a culture of failure, are losing students to GED programs, charter and private schools, and out-of-town migration.

Elected officials who raise taxes or rates during a time of Great Recession can expect to be roundly criticized—regardless of the merits of the arguments. When elected officials reward executives with raises, then ask for tax and rate increases—or more travel funds—the voters feel insulted. Politicos who hide their heads in the sand and refuse to do their business up front and in public with the consent of the governed will be turned out of office.

We citizens can’t boycott property tax increases but we can file protests. We might not shut off our electricity but we can shut down trouble lights and convert electric heating to biofuel sources. With selective purchasing, we can mitigate GRT increases. We don’t need tea party crazies to tell us that the traditional underground economy in Taos is getting a boost from short-sighted politicos.