Without relief from local governments, El Pasoans will face sharp increases in property tax bills
Tens of thousands of El Paso homeowners will be looking at huge property tax increases this year if local governments don’t make substantial reductions in the current rates.
Homeowners are caught in a pandemic vise that saw residential real estate prices shoot up while commercial values were flat. As a result, El Paso homeowners are shouldering an increasing share of property taxes — the main means that local governments rely on to provide services.
Oscar Trillo, a government teacher at Canutillo High School, saw the valuation on his 1,500-square-foot home in the rural Upper Valley jump from $69,000 last year to $102,000 this year, a 48% increase. Unless he gets a valuation cut through his protest of the appraisal, and tax rate reductions from local governments, Trillo is facing at least 10% annual property tax increases each year for the next four years.
Trillo’s property tax bill could go from less than $1,500 last year to at least $2,100 four years from now.
“As a family, we’re not going to be able to go out to eat or do the fun things that we like to do together as a family. We’re going to have to tighten our belts,” he said.
Residential property values in El Paso increased by an average of 17% in the past year, according to a preliminary Central Appraisal District database obtained by El Paso Matters under Texas open records laws. Commercial property increased by less than 0.5% and personal property owned by businesses declined by 0.8%.
Residential properties comprise 67.5% of all property on El Paso County’s preliminary tax rolls this year, up from 64% a year ago. As a result, many El Paso homeowners would see their property tax bills sharply increased even if local governments cut taxes.
If local governments don’t lower tax rates, more than 130,000 homeowners — almost two-thirds of owners of residential property in El Paso County valued at $40,000 or more a year ago — could face at least 10% increases on their property tax bills this year, according to an El Paso Matters analysis of CAD property valuations. Many of those with the highest valuation increases could see 10% annual increases in their tax bills for the next three or four years.
These numbers are preliminary and will likely go down as homeowners protest their appraisals. Senior citizens can qualify for exemptions that give them protection against large increases. But El Paso homeowners could experience one of the greatest tax increases in recent decades if local governments don’t reduce tax rates to offset rising property valuations.
Increases in property valuation don’t automatically trigger jumps in property tax bills. Texas law compels local governments to take into account changing valuations when setting tax rates, said Dinah Kilgore, chief appraiser for the El Paso CAD.
“The way the property tax code reads, a taxing entity is supposed to look at the value that’s certified as of July 25 and determine what rate will generate the same amount of revenue as the previous year,” Kilgore said.
“As your value goes up, based on the market and the sales, the tax rate should come down so it balances out so that you’re generating the same amount of revenue. … And when a taxing entity says, ‘Oh, we’re not going to raise your tax rate,’ well, they are raising your (taxes)” if property values rose, she said.
Under Texas law, if elected officials leave rates unchanged while property values rise, they have passed a tax increase.
Some neighborhoods see huge valuation increases
A number of older, mostly middle class neighborhoods in Central and Northeast El Paso saw the highest increases in property appraisals, an El Paso Matters analysis of CAD records shows.
“Some areas, because they are maybe a lower (cost), when (people) go to buy a home, they become very popular because they can get in. And so then you start seeing a lot more sales, offering more money. And so you start seeing kind of an inflated market. But we have to look at that,” Kilgore said.
Texas law puts a 10% cap on annual valuation increases that can be taxed on residential properties with homestead exemptions, meaning they’re occupied by their owners. People who own rental properties have no cap on tax increases.
The cap limits one-year tax shocks for homeowners, but people with large valuation jumps can continue to face ever-rising tax bills in the coming years. A homeowner whose property value increased by more than 32%, for example, would face three straight years of 10% increases if their valuation and tax rates didn’t change.
Commercial properties — many battered by loss of business during the COVID-19 pandemic — generally stayed flat in valuation this year. As with homes, commercial properties are appraised on their market value, but that’s more difficult to calculate because commercial properties are sold much less frequently than homes.
Unique effects of the pandemic — rapidly accelerating home sale prices and a massive disruption of many businesses — mean that homeowners represent a greater proportion of the total property base. And that means that homeowners will pay an increasingly higher share of property taxes in El Paso County.
What homeowners are facing
Trillo, the Canutillo High government teacher, bought his home in Westway five years ago from his parents when they divorced. The family has owned the house in rural Northwest El Paso County since 1996. He chose to live in the area, in part, because it’s outside the El Paso city limits and not subject to city property taxes.
Now, he’s concerned he’s facing increased taxes because of rising property valuations, with little to show for it.
“I would understand if my property taxes went up and all that good stuff if I got more benefits, if there were more things happening to the county,” he said. “I live out there and I understand, if I want to recycle things, I have to be cognizant and recycle things on my own. I have a blue trash can. I don’t have the same services as the city of El Paso, and that’s fine. I choose to live out there, I choose because of the taxes.”
Bethany Rivera Molinar and her family bought a home in the Rio Grande Neighborhood near Downtown El Paso in 2017 because she wanted to live in the community where she works. She is the executive director of Ciudad Nueva, a faith-based organization focused on enhancing the lives of neighborhood residents.
“It’s a huge increase for us, or it will be if it goes into effect. I can’t imagine families that are struggling or more vulnerable being able to keep up with these rising costs,” Molinar said.
Her 1,900-square-foot home was valued at $111,000 in 2020 and jumped to $134,000 this year, a 21% increase. That means that without decreased valuation or lower tax rates, her family could face at least $350 in additional property taxes this year and another $330 the following year.
“We have a family budget, we have child care and we’ve got a lot of things going on in health care issues. Agreeing to the appraisal means saying no to some things that our family might need to to thrive and survive,” she said.
When she decided to protest her valuation, Molinar realized she hadn’t obtained a homestead exemption that would lower her property taxes. She took care of that when she filed the protest.
Ensuring you have appropriate exemptions is an important way for homeowners to lower their tax bills, Kilgore said.
“I want to make sure you have your exemptions,”she said, adding that homeowners don’t need to pay someone to file for exemptions.
Homestead exemptions are available to homeowners who live in their residential property. People 65 and older are eligible for additional exemptions. Homeowners have to apply for the exemptions through the CAD, a process that takes a few minutes.
Trillo and Molinar are both protesting their property valuations, a step Kilgore encourages.
“We’re mass appraisal, we’re not perfect, we may forget something. That’s why we tell everybody to file a protest,” she said.
The protest deadline for most property owners was Monday, but those who received late valuations — such as Trillo — have 30 days after receiving the notification to protest.
Both Molinar and Trillo said they were protesting for the first time and felt intimidated by the process. Trillo said a friend in real estate offered to help him with his protest.
“So she’s compiling a PowerPoint presentation of, I guess, comparable properties,” he said, adding that he’ll share the information with his neighbors who are protesting their valuations.
Molinar also said she believes her protest can help her neighbors.
“We might not struggle as badly, but I know there are families out there that will and so I think we need to do what we can to speak against this, for their sake as well as mine,” she said.
What’s happening with tax rates
Property valuations are half of the formula for determining how much tax is paid by property owners. The other half of the formula is the tax rates set by local governments. Most El Paso property owners pay taxes to five governments — a school district, the city, the county, University Medical Center and El Paso Community College.
Property tax rates are set each summer by local governments as they adopt budgets for the coming year. Elected officials frequently say — inaccurately — that they aren’t responsible for increases in tax bills if they keep tax rates unchanged while property values rise.
Kilgore said she sometimes feels frustrated when elected officials blame tax increases on the Central Appraisal District, when those same elected officials are setting the rates that determine how much each property owner pays in Taxes.
“I think more than anything, it does kind of grate on me when politicians won’t take the time to really understand so that they can explain,” she said.
“In the state of Texas, it’s kind of the nature of the beast. It storms and it’s our fault. Rains come down and the lights go out, oh, the appraisal district must have done something again. We’re OK with that,” Kilgore said with a laugh.
Most El Paso governments haven’t yet discussed possible new tax rates, but officials with the city government and El Paso Independent School District have said they are looking at maintaining last year’s tax rate. Because of rising valuations, that would mean that most homeowners would face sharp property tax increases.
“Our goal is to hold the line on the tax rate to minimize the impact on not only residents but our commercial businesses as well, while at the same time providing those services that are very important to the community,” Robert Cortinas, the city’s chief financial officer, said at a media briefing earlier this month.
Cortinas said taxpayers would complain about a reduction in city services if the tax rate was decreased.
“So the city manager and myself, I mean, we can put a budget together that lowers the tax rate. However, there’s going to be a lot of griping and a lot of complaining about response times from the police and fire departments, about streets that are in horrible condition that aren’t being replaced and being maintained,” he said.
That kind of talk is frustrating to homeowners like Molinar.
“I feel like there’s a feeling of powerlessness. It just feels different in El Paso with city government and the way things are approved and the way things are paid for,” she said.
Tips on lowering your property tax bill
Make sure you have a homestead exemption on your house. Fill out a simple form and return it to the El Paso Central Appraisal District. There’s no need to pay someone to file an exemption on your behalf.
People 65 and older can get significant savings by claiming a senior exemption.
Protest your property appraisal if you believe it is too high. The deadline for protests has passed this year for most homeowners, but you can protest next year.
Tax rates are set by elected representatives. Reach out to the mayor, county judge, and your city representative, county commissioner and school board member to express your feelings on taxation and services provided by local governments.
El Paso Matters reporter Elida S. Perez contributed to this story.
Cover photo: El Pasoans filed protests of their home valuations on Monday at the Central Appraisal District offices. (Robert Moore/El Paso Matters)