How much will El Paso property taxes increase next year?

Back in late 2024, when Mayor Renard Johnson was locked in a runoff election for mayor against former City Council Representative Brian Robert F. Kennedy Jr., 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. Quote, 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 y'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 tax 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 a 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, Tani Acosta Nchapadro, 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 el Paso matters.org, where you can also learn about and register for our 9.15k run that's coming up on September 19th. Now, on to the conversation. Thanks for joining me, Alida. Thanks for having me. Good to be here. 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? 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, at least from those three. That's a pretty huge increase on a homeowner. 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. 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. Everything. The cost of everything is going up. But particularly for the city and county, you know, The biggest cost driver is public safety, is your law enforcement. That seems to happen year after year, particularly with the city, you know, 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 counterproposing was something that would be around 43, 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, you know, deny better pay or, you know, 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, you know, 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. 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? Well, you know, 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. No, they do not. Costs for everything is going up, you know, IT services, utilities, all that kind of stuff, construction materials. There's always been a shortage of funds for street repairs, you know. 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, you know, at some point they have to raise... raise the tax rate, unfortunately. Yeah, and the last couple of years, the cities 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 has 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. So when Mayor Leaser 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. Which can you explain what that is just briefly? 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, but yes, 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. You know, they did these one-time fixes. They got rid of vaturs or they used funding from their emergency reserves, you know, 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, you know, in your own household, if you figure out, you know, I need four new tires, I'll just, you know. borrow from this or I'll use a credit card, you know, you have to pay that bill. The bill comes around, you know. 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 balance this year to balance the budget. It's not increased taxes too much. He signaled that that was unsustainable on the campaign trail. He also said he you know, his overall goal was the lower taxes, which is a little bit competing with that goal of, you know, you don't want to just go with the no new revenue rate, but you don't want to increase taxes. They're kind of competing goals. But just to be fair to him, he didn't, you know, he didn't say that that was unsustainable to use that practice of the no new revenue rate. Yeah, and I asked the chief financial officer. You know, 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? Which is about like 660 million in that neighborhood, right? 24.5 million. Oh, no, you mean the... Yeah, 24.5 out of a total, about 660 million, something like that. So it would be a pretty big chunk of the budget. It would be a big chunk. But you'd have to cut out to achieve the no new revenue rate. Yeah, and he basically said, you know... He just gave me this look like, we just, we can't, I don't think we can do that. Because if they do, what you're looking at is cutting people, personnel. Like, you had, 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, you know, everybody having to, you know, unfortunately dip a little deeper into their pocketbooks.

Yeah, and maybe just one editorial comment I'll make. You always hear candidates on the campaign trail say, you know, 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, you know, similar things on the campaign trail as well as his opponent, Brian Robert F. Kennedy Jr.. But I just think... you know, 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 to, you know, when you hear campaign, people on the campaign trails, yeah, I'll just go in 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 you know figure out what to cut and and how to achieve that no new revenue rate it seems pretty difficult um but i do want to ask so these property tax increases you laid out of uh between the city and county city and county city and county city council to come in with with less of a tax increase 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, you know, 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, you know, 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 you know at some point and 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 um and they you know they always say You know, we need to do it. We want to do it. And then they do it. And then you're looking, you know, you think about it. And you're like, at some point, you're going to have to raise the tax rate. You know, you need the money to pay for services. Yeah, as your expenses climb and everything. You can't, like, just keep avoiding it to not be the bad guy. I mean, it's a really tough situation to be in.

Yeah, especially as the county has other priorities like renovating a scout at the park or, you know, they've chipped in a little bit of money on the deck park idea, you know, 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. Yeah, I mean, like they need to do like... basic water infrastructure, you know, storm water 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? Like, people will complain that there's like potholes and, you know, 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, you know? I don't know. Maybe to go back to... It may sound callous, but yeah, of course, but 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? Yeah, or instead of like patching up a leak on the roof because this month is tied on funds, you know, come... Come the next monsoon storm, you've got like 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. You know, it just exacerbates the situation. 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. right? I don't remember the exact figure, but yeah, like whatever the average value homeowner is, it's in the 200 range. So yeah, I just wanted to make that clear that obviously the tax bill, you know, escalates as their home value escalates as determined by the central appraisal district. So it's not a, you know, flat $300 increase across the board, of course. Yeah, 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... I'll 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. Yeah. So one thing I wanted to talk is. Or win the lottery. I guess that's always a good option, too, a backup option. Maybe some diversification. You put your investment funds in my lottery ticket. Not financial advice. But okay, so I just wanted to talk to 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? 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, you know. unprecedented health crisis, right? So there were, 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, is it's not like a shelter, like per se. What it is is like a triage point where if somebody finds themselves homeless or there's a situation where they need, you know, they. need services or something like that they will be either taken there or they go there and then at the welcome center they get you know 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 Hart Program with the police department, where that started on the west side. So they go and they'll... 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, you know, move on to different resources. So it's a really important part of that program that... that the ARPA funding was is running out for like those those funds expire at the end of August and so they needed um

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 like one-time uses, right? And so Representative Chris Canales advocated for the bulk of that, or actually initially all of it. It was $430,000, something like that. and 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 um chain of events that occurred during this very late night meeting. At first, at first, they talked about it, you know, the motion passed. There were questions, right? But a majority of council approved the funding. Less than an hour later, Representative Alejandra Chavez 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. On an unrelated item. Right, right. So she... She asked to reconsider the item, and then two other representative 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? 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? Well, that's what some of the city representatives believe. Like, it was, it was... for lack of a better term, revenge vote, if you will, you know. 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... 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, you know, Welcome Center, this is money we can use. So that's...

That's the rationale. Some of them said they wanted to hear more about it. They were surprised that that funding was even available, and so allegedly that's why they changed their minds. Maybe consider other uses or something. Yeah. But so what ended up happening? They came to a resolution, right, recently? They did, yes. So a couple of weeks go by. I know that Deputy Director John Martin of the Opportunity Center was meeting with... 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. And, but this time it was 380,000 that they allocated. And it passed unanimously. They did, 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 re-vote. of any kind. And provide some bridge funding, essentially, right? Yes. 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. 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... reach some sort of resolution, right, to provide some, at least short-term funding for the Welcome Center. Yeah, it's a really interesting program, and, you know, 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 homeless and, like, 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. Sure, and I would recommend readers to go reader pretty powerful reporting on, you know, 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, so last question here, Alida, 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 to city. And there's also several city council reps that are up for re-election this November, right? And I mentioned it at the top, like, there's also this broad issue of, you know, 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 like, let's increase the commercial tax base so that, you know, 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...

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, you know, can you tell us like who's up for reelection and just any thoughts on do you think that this tax increase that we're talking about here that could. you know, be adopted here in a few weeks. Do you think that will influence the elections at all in November? It's always possible. So who is it? We've got four incumbents up for re-election. So we've got your district 8, Chris Canales. We've got Alejandra Chavez in District 1. Both West Side reps? Yes, Art Fierro in District 6 and Ivan Nino in District 5. Both them on the East Side, right? Yes. And so Ivan, Niño, and Alejandra Chavez. were elected to fill unexpired terms when those city reps, I almost said abandoned 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 runoff. So we're getting into not just budget season, but election season. Yeah. A runoff happens when no one candidate gets north of 50%. Right, 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 think... I don't think any... I can't recall specifically how each of them voted on the tax rate on Tuesday. But, you know, 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... 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 know, 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, you know, 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. Yeah, well, and 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, you know, depending on what the appraisal district values meta's property, at something in the neighborhood of 15, 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. But... You know, and I think also there's a widespread realization or opinion that the incentives that city offered Meadow were too, you know, generous. And you're seeing in other communities around the U.S., you know, again, Meadow was approved in 2023. I think now if they came, the incentives would be much less, if anything. And so then, you know, the city would get a much bigger tax benefit, right? And so. Yeah, so it's like, yes, they're going to be one of the biggest taxpayers. The biggest, yeah. But. How much more could they have gotten if they didn't give them incentives? You know what I mean? Like how many more millions? Sure. 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? Yeah. Don't get me started. Just less thing here. I mean, I do think as we're sitting here in early August, and so the elections are, you know, three months away or so. But I think that we're hearing a lot of the consternation over the really, you know, big increase in electric bills. People are saying partly driven by a rate increase El Paso Electric implemented in May that. is retroactive and collecting costs from prior years. So you 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, you know, home prices are rising. Now taxes are going to increase more. And I don't know. you know maybe this is a little bit too 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 um you know maybe i'm wrong and i'm not trying to have a widespread indictment on city council i don't know some of this stuff is out of their control right but um it just seems like it could be a volatile november election maybe we see some incumbents if not ousted face you know powerful challengers, right? And so I'm just curious to see what the impact is politically at the ballot box in November.

You and me both. We will see how it plays out. And we'll be there on election night in the newsroom. We will be there every step of the win. And yeah, no, it's going to be an interesting election cycle for sure. Yeah, next few months. Okay, well, we'll leave it there. Alida, 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. And 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 yeah one one final thing is that the hearings for the tax rates are going to be august 17th for both the city and county so um I would obviously recommend if people are, you know, 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, you know, A, B, and C about the tax rate and complain and rightly so. And not one person speaks at these public hearings. If you've got something to say, make sure it gets heard by the people that need to hear it, you know. Make your voice heard, yeah. All right, well, we'll leave it there, Alida. I appreciate your time, and maybe we'll follow up after these tax rates are approved and see what the final impact is. Yes. Thank you for having me.