El Paso City Council votes unanimously in favor of decrease in city property tax rate

El Paso Times
Adam Powell, El Paso Times
August 3, 2023

Along with historic property tax relief at the state level, El Pasoans will see a decrease in their local property tax rate following a vote by the El Paso City Council.

It doesn't mean all property owners will see a smaller tax bill because of rising home values. The value of taxable property in the city increased this year compared to last year.

The City Council voted unanimously in favor of the proposed 83.2-cent property tax rate during a budget hearing, down from the 86.2-cent rate in the 2022-2023 budget.

Despite the decrease, forecasts show an increase of roughly $3.65 billion in taxable values for next year because of new construction and rising home valuations.

According to Chief Financial Officer Robert Cortinas' presentation, after exemptions, taxable property values in El Paso come in at just under $47.6 billion, an 8.3% increase over last year's numbers.

• Property tax exemptions rose to $38.3 million
• Homestead exemptions for $5.2 million
• Over 65/disabled exemptions at $17.7 million
• Disabled veterans' exemptions totaled $15.4 million

A notice will be published presenting the tax rate to the public ahead of public comments on Aug. 14 and a final vote from the City Council the following day.

"As I stated early on, I supported a no-new-revenue tax rate, and I believed the City Council and the city team could find the necessary efficiencies to achieve this goal while still addressing the needs of our community," Mayor Oscar Leeser said in a news release following Monday's vote. "(Interim City Manager) (Cary) Westin and his team have done a great job of addressing the community's priorities, listening to the City Council's concerns and understanding that we must be fiscally prudent and innovative in our approach."

Council approves early payout on $41 million debt

City Council voted to use the expected $37.6 million General Fund surplus and $3.5 million in unrestricted reserves to pay off the $41 million Transportation Reinvestment Zone debt early.

City Chief Financial Officer Robert Cortinas reported that an early payout for TRZ 2, which includes projects at the I-10/Loop 375 interchange, the FM 659 Zaragoza direct connectors and I-10 frontage road expansions, would provide $7.8 million annually for the city's General Fund beginning in 2024 and save the city some $20.6 million in future interest costs.

Leeser praised the move as a way to prepare "for the future of our community" and ensure taxes will not have to be raised for every city requirement.

"The TRZ needed to go away," he added during Monday's meeting. "This is really an incredible thing for El Paso."

West Side city Rep. Brian Kennedy supported the fiscal policy adding El Paso's surplus makes it possible "to retire some debt."

Westin stated that even with the use of reserve funds, the city would never go below the three-month operating reserve kept on hand, a common benchmark for sound city operations.

"The whole idea is to bring the operating reserves to a healthy three months and keep our reserves there," Westin said. "No need to go past that."

What else is in the proposed budget?

While the budget still has to be approved, the proposal presented by Cortinas and Westin this week attempts to offset the impact of inflation and other economic pressures on taxpayers with significant investments in public safety, infrastructure projects and new amenities.

The proposed budget includes the following expenditures:

• An increase in the number of police officers and firefighters with additional training academies and retaining police officers through competitive pay
• An allocation of funds for facility upgrades and repairs, as well as funds to replace vehicles and heavy equipment
• Fund the opening of new facilities through the 2019 Public Safety Bond program
• An additional $6.4 million in annual pay-go funding for street resurfacing projects, providing an annual total of $16.4 million
• The completion of current city projects, such as the Mexican-American Cultural Center, the La Nube Children's Museum and the penguin exhibit at the El Paso Zoo
• Increase starting city salaries by $1, to $13.11 per hour
• Increase funding for the city's Tuition Assistance Program
• No increase to city employee health care costs.