How much will El Paso property taxes increase next | RSS.com
Diego Mendoza-Moyers:
Back in late 2024, when Mayor Renard Johnson was locked in a runoff election for mayor against former City Council representative Brian Kennedy, he said in a debate that he was focused on lowering property taxes.
But he made a careful argument: Taxes are too high on property owners, but also that keeping the city’s taxes flat was unsustainable because the city needed more money to adequately fix roads and provide other city services.
Johnson didn’t say he would immediately cut property taxes. Instead, he said bringing in new big businesses that pay taxes was the way to lower homeowners’ tax bills. In theory, a commercial development could come to El Paso, pay a big tax bill, and then the city wouldn’t have to collect as much from residential homeowners.
“Through economic development, bringing in more of a commercial base, we can lower your taxes. Other communities have figured this out,” Johnson said.
Ironically, there’s a project in El Paso that cuts directly toward that goal: the Meta data center, which will become the city’s biggest taxpayer when it’s fully up and running. But given the public concerns about data centers, the city recently adopted a set of policies that will make it harder for other companies to build data centers within El Paso city limits.
That leaves an open question. If not big, multi-billion dollar data centers, which have their own large set of trade-offs, what’s the city’s strategy to attract other commercial taxpayers to El Paso and reduce the cost burden on residents?
I’m sharing this monologue with you all because, this week, we learned that El Paso City Council is considering adopting a budget and tax rate later this month that will increase residential property tax bills by more than $100 on average. At the same time, El Paso County Commissioners may also adopt a budget that demands a big tax increase from homeowners as well.
But what’s driving our local government to implement big tax hikes this year? What will the dollar impact be on homeowners across the city? And what could we see come election time in November?
Elida Perez, a senior city hall reporter with El Paso Matters, will join the podcast in a moment to talk about her reporting on the city and county budgets and property tax increases on the table.
First, this El Paso Matters podcast episode is brought to you by our podcast title sponsor Tawney, Acosta and Chaparro, truck crash and injury attorneys. Their team of local, seasoned trial attorneys are ready to help if you’ve been injured in a crash.
And you can sign up for our newsletter or read our free reporting at elpasomatters.org, where you can also learn about and register for our 9.15K run that’s coming up on September 19th.
Now, onto the conversation.
Thanks for joining me, Elida.
Elida Perez: Thanks for having me. Good to be here.
Diego: So, let’s just start with the big question and just get into it. How much could property taxes increase in El Paso next year between tax hikes that the county and the city are both considering implementing?
Elida: So, if they stick with the tax rates that they introduced, then the average-value homeowner would be looking at at least a $300 increase on their property tax bill. So, that breaks up a little bit into what the city is proposing is the voter-approval rate, the highest that they can introduce to fund the budget. That would put an extra $132 onto the city’s portion of the tax bill.
Now, the county, they also introduced the voter-approval rate as their starting point, if you will. That would add $164 to a property tax bill for the average-value home. And then I think the hospital district may be about $10. So, it’s a little more than $300 bucks, at least from those three entities.
Diego: That’s a pretty huge increase on a homeowner.
Elida: It really is. And, unfortunately, I don’t know that it will go down.
The county traditionally tends to introduce the highest tax rate they can without going to voters, the voter-approval rate. They do that by practice annually and then they work to adopt a lower tax rate to fund the budget. But we don’t know if they will do that or if they will go with the voter-approval rate. They can go lower, but they cannot go higher.
Diego: Yeah, and I want to ask you about the process ahead as they finalize the budgets – the city and county do. But, I guess, I’m just curious, generally, what’s driving this increase in taxes and spending for the city as well as for El Paso County?
Elida: Everything. The cost of everything is going up. But, particularly for the city and county, the biggest cost driver is public safety, is your law enforcement. That seems to happen year after year.
Particularly with the city, the police and fire, that’s the biggest part of the budget. That’s 57% of the budget. The police collective bargaining agreement is going to expire next year. The fire collective bargaining agreement is going to expire at the end of this month, at the end of August. And, so, they’re actively negotiating a new contract.
And those contracts add millions and millions of dollars onto the city budget because the fire union is not going to come in and say, “We don’t need any new benefits.” What they’re proposing alone would be $63 million more over a four-year period. And the city’s counter-proposing was something that would be around $43 million, I think, from what I recall.
So, they’re in that active negotiation, and that’s just going to add millions and millions of dollars. If they don’t come to an agreement, the risk is that the fire union can say, “Let’s take it to voters and see what they think we deserve.” And most of the times, people will vote for public safety. They’re not going to deny better pay or better benefits and things like that to our fire department. That happened a few years ago when they couldn’t reach an agreement and fire took it to voters and voters approved.
And, so, they work really hard to try to come to an agreement, but those always have millions of dollars of impact. And then the following year, they’ll have to go to the Police Department union and do the same thing, renegotiate that contract that will only add more money to the budget that is required to be spent.
Diego: So, in addition to more costs associated with public safety, police and fire, what else is driving this big increase in spending and the need for higher taxes, right?
Elida: Everybody feels this at home. It’s no different for the city. They don’t have a different – they don’t get a discount from the electric company either, I don’t think. Unless I’ve been all wrong all these years. Cost for everything is going up, IT services, utilities, all that kind of stuff, construction materials. There’s always been a shortage of funds for street repairs. The city has been for a long time trying to build up funding for street repairs because they just can’t keep up. And, so, at some point they have to raise the tax rate, unfortunately.
Diego: Yeah, in the last couple of years, the city’s managed to avoid that, right? And I think they just adopted a no-new-revenue rate, which had a pretty minimal effect on taxes. I think maybe if your home value went up, your tax bill went up some, but it wasn’t to the magnitude of this year. But at the same time, the last couple of years, inflation has been present, right? Costs have been rising for a while.
And, so, I just wonder if you can explain how the city was able to avoid implementing this kind of tax increase the last couple of years, but now they have to this year?
Elida: So, when Mayor Leeser was back on the council, for two years in a row – not this last year, but for two years in a row – he insisted that the city come back with a no-new-revenue rate funded budget.
Diego: Which, can you explain what that is just briefly?
Elida: Yeah. So, the no-new-revenue rate will generate the same amount of taxes – of tax dollars – from the same properties as the year before with that rate. So, it’s not not a tax increase. A lot of these local governments like to say, “We’re not raising taxes, we’re not raising taxes.” But they are raising taxes because most people, a lot of people, do see a tax increase based on their home value. So, we’ve had to get on them a couple of times for that.
But, yeah, so, the former mayor insisted that they adopt that, that he would veto anything other than a no-new-revenue rate. But what that did was, it really just delayed spending. They did these one-time fixes. They got rid of a TIRZ or they used funding from their emergency reserves, their fund balance, to do that. And that’s really not something that is sustainable in the long run.
And the chief financial officer, Robert Cortinas, has repeatedly warned them that “We cannot continue to do this.” Like, we have to pay for stuff. And these little one-time fixes are just – they’re not going to work in the long run.
Now, last year, they did adopt a higher tax rate than the no-new-revenue rate, but they were still using those one-time fixes to try to make it happen, like deferring costs of vehicle maintenance, stuff like this. So, in your own household, if you figure out, I need four new tires, I’ll just borrow from this or I’ll use a credit card, you have to pay that bill. The bill comes around.
Diego: Yeah. And I think Mayor Renard Johnson said on the campaign trail back in 2024 that the no-new-revenue rate was unsustainable. And I think he was signaling that the approach of City Council prior to just kind of, “Hey, let’s dip in the fund balances here to balance the budget. Let’s not increase taxes too much.” He signaled that that was unsustainable on the campaign trail.
He also said his overall goal was to lower taxes, which is a little bit competing with that goal of you don’t want to just go with the no-new-revenue rate, but you don’t want to increase taxes. Their kind of competing goals. But, just to be fair to him, he did say that that was unsustainable to use that practice of the no-new-revenue rate.
Elida: Yeah, and I asked the chief financial officer if, let’s just say that this council decides, “No, we’re going to insist on the no-new-revenue rate.” What does that look like for the city? That would mean like a $24.5 million cut to the existing budget that they’ve created, right?
Diego: And which is about $660 million in that neighborhood, right?
Elida: $24.5 million. Oh, no, you mean the –
Diego: $24.5 million out of a total (budget) about $660 million, something like that. So, it would be a pretty big chunk of the budget that you’d have to cut out to achieve the no-new-revenue rate.
Elida: Yeah, and he basically said – he just gave me this look like “We can’t. I don’t think we can do that, because if they do, what you’re looking at is cutting people, personnel.” You would have to cut from the workforce and I don’t think anybody’s wanting to do that, willing to do that. So, it comes at the cost of everybody having to, unfortunately, dip a little deeper into their pocketbooks.
Diego: Yeah. And maybe just one editorial comment I’ll make. You always hear candidates on the campaign trail say, “No, I’m not going to raise taxes. I’m just going to get in there with a fine-tooth comb and scrub waste out of the budget” and things like that. We heard Renard Johnson say similar things on the campaign trail, as well as his opponent, Brian Kennedy.
But I just think, when you face reality, you get into office and you go, “Man, there’s really not a lot of meat on the bone here that we can just hack off with no problem. And, so, we have to raise taxes.” It’s just an interesting thing that I think, for voters, when you hear campaign people on the campaign trails, “Yeah, I’ll just go into the budget with a fine tooth comb and carve out expenses. We’ll figure it out.” It’s a little bit more difficult when you’re actually in the seat trying to figure out what to cut and how to achieve that no-new-revenue rate. It seems pretty difficult.
But I do want to ask, so these property tax increases you laid out between the city and county, almost $300, are those set in stone? Do you think that there’s any room for some sort of negotiation or some sort of action by county commissioners court or city council to come in with less of a tax increase?
Elida: Well, I think the vibe I’m picking up from the city is that this is going to be the tax rate. I’m not really seeing wiggle room there. Now, maybe they’ll come back with a little adjustment here or there. But this time, reading the room, looks like this is happening. So they can, they can lower the tax rate. I don’t think that they will on the city side.
The county, that’s a little more flexible, I think, because they generally, as I said before, they always go with the ceiling and then try to work down a little bit. But they’re kind of in a similar situation as far as needing to fund, needing to pay for services, all kinds of things that the county does.
They generally try to go lower, but I think by our calculations, if they were to say go to the no-new-revenue rate, which some of them really try to push, they’d have to cut like $40 million out of their budget to get to a no-new-revenue rate. And, at some point – and I’ve seen the county go through their budgets, and I’ve seen the city go through their budget cycle now so, so many times. And they always say, “We need to do it. We want to do it. And then they do it.” And then you think about it and you’re like, at some point, you’re going to have to raise the tax rate. You need the money to pay for services.
Diego: Yeah, as your expenses climb.
Elida: You can’t just keep avoiding it to not be the bad guy. I mean, it’s a really tough situation to be in.
Diego: Especially as the county has other priorities, like renovating Ascarate Park or they’ve chipped in a little bit of money on the deck park idea. So, it’s like, the county has these kind of ambitious projects they want to participate in, but then there’s the reality of escalating costs and things like that.
Elida: Yeah. I mean, like, they need to do basic water infrastructure, stormwater management, that kind of stuff. If they just keep putting it off and putting it off and putting it off, I mean, what’s the alternative, right? People will complain that there’s, like, potholes and “Why is my street flooding again?” It’s, like, well, because the political thing to do is to not raise taxes. But if you need money, you need the money. I don’t know.
Diego: Maybe to go back to the household example, it’s kind of like if you put off repairs and maintenance of your home for so long, it’s going to become a big problem and your house is going to be the ugly house on the block, right?
Elida: Yeah. Or instead of, like, patching up a leak on the roof because this month is tight on funds, come the next monsoon storm, you’ve got a full-on catastrophe in your home, and you need to replace a roof or you need to replace carpets or drywall that was damaged. It just exacerbates the situation.
Diego: Even so, as I’m going to face these tax bills, it’s not wonderful for me either.
But one thing I just wanted to clarify too, so is it accurate to say that this $300 tax increase figure we’re referring to, that is on a home that’s valued at about $230,000? Is that right?
Elida: I don’t remember the exact figure, but yeah, whatever the average value homeowner is, it’s in the $200,000 range.
Diego: So, I just wanted to make that clear that, obviously, the tax bill escalates as your home value escalates as determined by the central appraisal district. So it’s not a flat $300 increase across the board, of course.
Elida: Some people will pay less based on exemptions or whatever. Some people will pay more. That’s really the middle range. And, really, the only thing that people can do is start saving, or make sure that their exemptions are squared away. So, everybody that owns a home can get the homestead exemption. I guess where it’s nice to be aging is that the older you get, the more exemptions you can qualify for. And, so, really that’s the only line of defense is making sure those exemptions are in place. Or win the lottery.
Diego: I guess that’s always a good option, too, a backup option. Maybe some diversification. You can put your investment funds into buying lottery tickets. No, not financial advice.
But OK, so, I just wanted to talk through kind of a side issue, a little bit off topic, but related to the city budget, which is the Welcome Center. And, so, I just wonder if you can A, tell us what the Welcome Center is, what services it provides. And then kind of talk through – there’s a little bit of a budget controversy there with funding the Welcome Center, right?
Elida: Yes. So, the Welcome Center started with the pandemic. And it’s really part of this El Paso Helps initiative that the city started when the pandemic hit and the whole community was figuring out how to address this unprecedented health crisis, right?
So, there was funding that the city received from the federal government, the ARPA funding, American Rescue Plan Act, funding for pandemic relief. So, the Welcome Center started, the Opportunity Center for the Homeless, they started the Welcome Center.
And what the Welcome Center is, it’s not a shelter, per se. What it is is, like, a triage point where, if somebody finds themselves homeless or there’s a situation where they need services or something like that, they will be either taken there or they go there and then at the Welcome Center, you get a shower, you get clothes, a meal, get kind of stabilized, if you will. And then the partner organizations, because there’s dozens of nonprofits that are working together through this, they come together and figure out where the best place is for that individual to then go and continue to receive services.
So, it’s really, like, an emergency point. So, there’s other homeless initiatives around the city like the HEART program with the police department where that started on the West Side. So, they go and they’ll do outreach. And let’s say they come upon a homeless individual. They’ll try to build rapport, see if they can convince them to accept services, because it’s a really complicated and nuanced situation.
If they accept help, then they’ll take them to the Welcome Center. And this is a 24/7 place where they can bring people in. So, it really gets people off the streets immediately, get that assessment. Sometimes they stay a couple of nights or whatever while they go and then move on to different resources. So, it’s a really important part of that program that the ARPA funding is running out for. Like, those funds expire at the end of August.
And, so, they need funding to continue the operation of the Welcome Center. And what happened with the city council was that there was some interest, some ARPA interest that was available that would have been ideal for one-time uses, right? And, so, Representative Chris Canales advocated for the bulk of that – or, actually, initially all of it. It was 4430,000, something like that. in interest savings to go to the Welcome Center to keep them operational for a few more months until they figure out some more funding sources.
And it was just a very bizarre chain of events that occurred during this very late night meeting. At first, they talked about it, the motion passed. There were questions, right? But a majority of council approved the funding. Less than an hour later, Representative Alejandra Chávez asked to reconsider her vote and bring the item back up. And there had been some awkward little tense moments among the council. There’s been a lot of tension on the council with this whole Meta thing that’s been unfolding. And it kind of just was lingering into this meeting, I think.
Diego: On an unrelated item.
Elida: Right. So, she asked to reconsider the item and then two other representatives, herself and another rep, changed their votes, created a tie, and the mayor broke the tie to not give them the funding. So it was like, what is happening here?
Diego: And, just for a little more context, Chris Canales voted to try to cancel the Meta contract. Again, a separate issue. But that was a very controversial thing. Maybe that was where the disagreement over the Welcome Center funding stemmed from, you think?
Elida: Well, that’s what some of the city representatives believe. Like it was, for lack of a better term, a revenge vote, if you will. And some of them even said that outright. So I’m not making it up. You can’t make this stuff up.
And yeah, it was just a strange decision. Now, some of them said, because I spoke to literally each and every one of them for the follow-up story on that. And some of them said, well, they weren’t briefed by the city, by staff that this $430,000 was available at all, that they just mentioned it like right there. And said, “Welcome Center, this is money we can use.” So, that’s the rationale. Some of them said they wanted to hear more about it. They were surprised that funding was even available. And so, allegedly, that’s why they changed their minds.
Diego: Maybe consider other uses or something?
Elida: Yeah.
Diego: But, so, what ended up happening? They came to a resolution, right, recently?
Elida: They did, yes. So, a couple of weeks go by. I know that Deputy Director John Martin of the Opportunity Center was meeting with the city representatives to explain to them what the Welcome Center is, what the Welcome Center does, why it’s so important for the homeless outreach and response in the city. And they discussed it on Tuesday during another budget hearing where they also introduced the tax rate. But this time, it was $380,000 that they allocated. And it passed unanimously. John Martin was at the meeting, so he did answer a couple of questions and stuff. But this time it passed unanimously. There was no revote of any kind.
Diego: And provide some bridge funding, essentially, right, for the Walking Center?
Elida: Yeah, because they do still need to find funding to continue on a more permanent basis. And that’s a whole other issue that we can discuss at a different podcast.
Diego: Sure. Yeah, I just wanted to get into that debate because I think it kind of shows how the personal relationships on council and how other issues seep into the development of the budget, right? And, so, it just kind of was an interesting example, but I was glad that they reached some sort of resolution, right, to provide some at least short-term funding for the Welcome Center.
Elida: Yeah, it’s a really interesting program and they do a lot of good. Like ,they even take in homeless individuals that have pets. That is a huge barrier for people that are on the, that are, homeless and have a dog, for example. If somebody comes to offer help, the first thing they ask is, “Can I take my dog?” And if the answer is no, they’re not going anywhere. Like, they’re not going to go anywhere without their pet because that is their companion. But they do accept them there at the Welcome Center. So yeah, it’s a very interesting topic that definitely we could talk for hours about.
Diego: Sure, and I would recommend readers go read your pretty powerful reporting on some of the issues about those barriers of people not wanting to seek services because of their dog and people on the street and all that kind of stuff.
So, anyways, last question here, and then we’ll wrap up. I just want to talk about the politics of this tax increase that’s on the table for both the city and county. But, really, I think the city – I think voters are more maybe attuned to city council or more aware of what’s going on with the city. And there’s also several city council reps that are up for re-election this November, right?
And I mentioned at the top, there’s also this broad issue of Renard Johnson and others on city council running on this platform of not necessarily like, “Hey, we’re just going to pull a lever and lower your taxes immediately.” But this broad goal of “Let’s increase the commercial tax base so that businesses are paying more of the city’s costs and then therefore the city has to ask less from residential owners.”
So, I know that’s the broad goal and I kind of pointed to the irony of, like, Meta kind of goes at that goal, but then now the city says, “No, we don’t want to take that route.” So, for me, there’s kind of this unanswered question of, like, “Well, if not data centers, hey, that’s fine. But then what are you going to do to accomplish this goal of raising the commercial tax base?”
And, so, anyways, I just wonder what you think? Can you tell us who’s up for re-election and just any thoughts on, do you think that this tax increase that we’re talking about here that could be adopted here in a few weeks, do you think that will influence the elections at all in November?
Elida: It’s always possible. We’ve got 4 incumbents up for re-election. So, we’ve got your District 8, Chris Canales. We’ve got Alejandra Chávez in District 1.
Diego: Both Westside reps.
Elida: Yes. Art Fierro in District 6 and Ivan Niño in District 5.
Diego: Both of them on the Eastside, right?
Elida: Yes. And, so, Ivan Niño and Alejandra Chávez were elected to fill unexpired terms when those city reps, I almost said abandon ship, those city reps left their seats to run for mayor unsuccessfully. But, so, they’re finishing out those terms and if they want to serve another full term, they’ve got to win their election this November. Maybe things will go for runoffs. Generally, they do. Generally, the city council races go for runoffs. So we’re getting into not just budget season, but election season.
Diego: Yeah. A runoff happens when no one candidate gets north of 50%, right?
Elida: Right. And, so, I definitely think that taxes will come into play in this election cycle. It’ll be interesting to see how these incumbents defend their records. I don’t know that – I can’t recall specifically how each of them voted on the tax rate on Tuesday. But you see it time and time again where candidates will say, “No, I’m not going to raise taxes.” But don’t offer a very solid solution for how they’re going to pull that off. Because at the end of the day, if they don’t raise taxes, then something’s got to give, right? Something’s not going to get funded. And that’s either services or people. People are going to lose their jobs, or you’re going to get potholes, you’re going to have overgrown medians, you’re going to have all kinds of things go.
And like I said, I mean, I’ve generally not seen a very good solution come out of candidates on how they’re going to resolve that problem. Some of them say, like the mayor, when he was campaigning on bringing new development or new businesses or whatever.
I could be totally wrong, but it’s my personal opinion that, so long as they’re continuing to give incentives and tax breaks to companies that come in, then the tax base is never going to shift to commercial because the commercial properties that they’re bringing in or the businesses that they’re bringing in, they’re giving tax breaks to. So how does it ever shift if these new people that they’re luring aren’t paying their full share of taxes? But I’ll get off that little soapbox, because I mean, I could be completely wrong.
Diego: It’s interesting, your point about the tax breaks, again, pointing to the Meta deal, which I just bring up because they’re going to pay, depending on what the appraisal district values Meta’s property at, something in the neighborhood of $15 million, $16 million a year, which will make Meta the biggest taxpayer in the city.
Again, I recognize people have all sorts of issues and concerns about Meta, and that’s totally fine. And I think also that there’s a widespread realization or opinion that the incentives that the city offered Meta were too generous. And you’re seeing in other communities around the U.S. – again, Meta was approved in 2023 – I think now if they came, the incentives would be much less if anything. And, so, then, the city would get a much bigger tax benefit, right?
Elida: It’s like, yes, they’re going to be one of the biggest taxpayers–
Diego: The biggest, yeah.
Elida: How much more could they have gotten if they didn’t give them incentives? You know what I mean? Like how many more millions? And what kind of an impact would that have had on helping to shift that tax burden from commercial, from homeowners to commercial? You know what I mean?
Don’t get me started.
Diego: Just last thing here. I mean, I do think, as we’re sitting here in early August and so the elections are three months away or so. But I think that we’re hearing a lot of the consternation over the really big increase in electric bills. Partly driven by a rate increase El Paso Electric implemented in May that is retroactive and collecting costs from prior years. So, EPE implemented that rate increase, and then it’s so hot that it’s driving more usage.
Anyways, the point is electric bills are rising, water bills are rising, home prices are rising, now taxes are going to increase more. And I don’t know – maybe this is a little bit too (much) of an editorial comment. I don’t know what record the city council is going to run on that’s going to sell voters that, “Hey, give me four more years and things are going to get better for you.” Maybe I’m wrong, and I’m not trying to have a widespread indictment on city council. Some of this stuff is out of their control, right? But it just seems like it could be a volatile November election. Maybe we see some incumbents, if not ousted, face powerful challengers, right? And so I’m just curious to see what the impact is politically at the ballot box in November.
Elida: You and me both. We will see how it plays out.
Diego: And we’ll be there on election night in the newsroom.
Elida: We will be there every step of the way. And yeah, no, it’s going to be an interesting election cycle for sure.
Diego: Yeah, next few months. OK, well, we’ll leave it there, Elida. I appreciate you breaking down this tax increase for us. I know it’s going to be a topic of much debate and discussion over the next few weeks. So I appreciate your primer for kind of filling us in. As a new homeowner, I’m not really looking forward to my tax bill, but it is what it is and it’s the reality the city’s facing, right?
Elida: Yeah. One final thing is that the hearings for the tax rates are going to be August 17th for both the city and county. So, I would obviously recommend, if people are concerned or have questions or whatever, they can go to these meetings and sign up for public comment or they can submit a public comment. Too often I see a lot of people say, A, B, and C about the tax rate and complain and rightly so and not one person speaks at these public hearings. So, If you’ve got something to say, make sure it gets heard by the people that need to hear it.
Diego: Make your voice heard, yeah. All right, well, we’ll leave it there, Elida. I appreciate your time, and maybe we’ll follow up after these tax rates are approved and see what the final impact is.
Elida: Yes. Thank you for having me.
The post Podcast: El Paso homeowners could face more than $300 in property tax increases appeared first on El Paso Matters.
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