El Paso city officials have been bragging that they plan to substantially decrease the city’s property tax rate from last year.
“City of El Paso Approves Largest Tax Rate Reduction in More than 35 years,” headlined a recent news release from City Hall.
In a recent El Paso Times column, city Reps. Cassandra Hernandez, Isabel Salcido, and Claudia Rodriguez said the city planned “a significant property tax rate reduction” this year.
But city officials are actually proposing a substantial tax increase, according to a notice the city is required to publish under the Texas truth-in-taxation law.
The city’s “proposed tax rate is greater than the no-new-revenue tax rate. This means that City of El Paso is proposing to increase property taxes for the 2022 tax year,” states the notice published in Friday’s El Paso Times.
El Paso homes would see an average 6.1% increase in city taxes, the notice shows.
El Paso City Council has approved a proposal to set the property tax rate at 86.2 cents per $100 of a property’s valuation.
City taxes on an El Paso home with an average value of $166,823 – including a homestead exemption, which lowers the taxable value – would be $1,439 under the city’s proposed tax rate. That’s $83 more than the current, annual tax bill, or an increase of 6.1%, according to the city notice.
The City Council will hold a public hearing on the proposed tax rate at Downtown’s City Hall at 9 a.m. Aug. 23. It’s scheduled to vote on final approval of that rate the same day, according to a city news release.
The proposed rate is lower than the current tax rate of 90.7 cents per $100 of valuation, and that’s what city officials have been touting.
However, Robert Cortinas, the city’s chief financial officer, said in a statement that city officials aren’t misleading residents when they tout the 4.49-cent rate reduction because it’s the largest reduction in the tax rate since 1986.
But because El Paso property values substantially increased this year, the city could raise the same amount of money as last year with a much lower tax rate.
That rate, labeled as the “no-new-revenue tax rate,” is 82.3 cents – or almost 4 cents lower than the city’s proposed new rate.
That’s the tax rate the city would have to adopt to have no tax increase.
“The ‘no-new-revenue tax rate’ would have required further budget reductions of almost $17 million, at a time when the City is dealing with increases due to inflation, contractual obligations, and the need to be aggressive with pay raises for (its) workforce,” Cortinas said.
If the city had proposed a tax rate just a penny higher than its proposed 86.2 cents rate, it would have been required to get that rate approved by city voters – something government officials usually try to avoid. The voter-approval tax rate is 87.2 cents per $100 of valuation.
“The proposed rate of 86.2 cents was recommended to reduce the tax rate as much as possible, while not negatively impacting public safety, street, health, or any other services provided to our community,” Cortinas said.