While it is evident that New Mexico’s system of collecting property tax needs a realignment, it is less clear that proposals being put forth to fix it are the right solutions.

Here is New Mexico’s dilemma. Years ago, the purchase and sale of homes — with their concurrent rapid increase in property values — led to a situation where longtime homeowners saw their properties shoot up in value simply because a house nearby had sold. Longtime residents were in danger of losing their property because taxes were skyrocketing. In 2001, the Legislature passed a law to limit to 3 percent the amount that a county assessor could increase residential property value in a year. More than a decade later, the result of that well-intended fix is that brand-new property owners often find themselves paying significantly more in taxes for the exact same services. Their homes, after all, are valued higher, because valuations reset when a home is sold. The current system is not fair. Resolving it, however, is not easy because whatever the Legislature does, someone will be paying more in taxes even if the rate assessed and collected by the government remains unchanged. With cases before the state Supreme Court liable to force tax collectors’ hands, the Legislature nevertheless needs to act.

One proposal calls for all properties to be assessed at 90 percent of market value by 2014, and also increases the annual valuation cap from 3 percent to 5 percent — which means that people who stay in their homes still won’t see their property taxes jump even if their neighbor sells at a huge profit. To soften the blow for people who have owned their homes for years, the law would offer a 10 percent reduction in value to people who have owned a home for 10 years and 20 percent off to those who have been in the house for 20 years and who are age 65 or older. In Santa Fe, some 10 percent of homes, about 5,000, have not changed hands since the 2001 law and are undervalued. Still, some property owners, whose homes are only valued at 40 percent of market price, could face a serious increase in taxes.

We believe that lawmakers should fix this problem in the next session — as assessors point out, with homes back at the values of 2004, the hit that owners of undervalued property face is less than it otherwise would be. The time is now to act. We think the proposal being discussed has several attractive features — it will bring about equity in paying taxes, and a legislative solution is preferable to one ordered by the court. However, we look forward to a vigorous debate over how tax breaks will be offered. Just because someone has lived in a property for decades does not mean he can’t afford to pay taxes. Just because someone is elderly does not mean she can’t afford to pay taxes. We definitely sympathize with supporting longtime residents who are property rich and cash poor, but wonder if there is a simpler way to do that.

Rather than trying to equalize assessments by 2014, perhaps the Legislature should try and stretch the time frame out so that an increased tax burden can be phased in, softening the blow. We would further recommend that the state and counties bite the bullet: Equalize property valuations and do not offer reductions for longtime property owners or the elderly. Instead, base deductions on income and net worth, whether in assessing a brand-new homeowner or an elderly longtime resident. Those deductions will help both the elderly and the cash-poor keep their homes. With all property taxes equalized, say, in five years, the state could consider capping valuation increases at the current 3 percent to keep taxes stable for people who own homes as places to live rather than investments.

Any solution, we think, should seek to equalize tax payments while protecting low-income homeowners. For the most part, though, people should pay taxes based on what their property is worth — in a system that is simple, equal and fair.