El Paso homeowners may not see as big an increase on the city’s portion of their property tax bill as projected after the City Council approved lowering the proposed tax rate for next year.

The council on Monday voted 7-1 to approve introducing an ordinance to set the new property tax rate at 86 cents per $100 in property valuation – down 4.49 cents from what was initially proposed in July. City Rep. Peter Svarzbein voted against the item.

Svarzbein could not immediately be reached for comment.

“We believe this tax relief will help our taxpayer and continue our efforts to fully recover as a community,” said City Manager Tommy Gonzalez of ongoing economic challenges from the pandemic in a press release issued Monday.

Despite the lowered tax rate, the city’s portion of a tax bill on an average-value home – appraised at $167,000 – would increase by about $83. That’s because the drop in the tax rate does not offset the steep increase in home property values.

A public hearing will be held Aug. 16 before council adopts the budget and tax rate at its Aug. 23 meeting.

The proposed tax rate reduction comes after some city representatives directed Gonzalez to lower the initial proposed rate of 90 cents – itself slightly lower than the previous year’s rate. Under that proposed rate, an average value home would have paid about $150 more in city taxes.

The initially proposed tax rate would have increased the average homeowner’s city property tax bill by about 16%.

City officials issued a press release following Monday’s vote that boasts that the lowered proposed tax rate is the “largest tax rate reduction in more than 35 years.” That claim misleads the public because the revised rate doesn’t translate into lower property tax bills.

City Rep. Claudia Rodriguez, during the Monday meeting, asked Gonzalez how she could explain to constituents why their city tax bills keep increasing when the city reported a surplus of about $22 million that will go toward the general fund reserves the city is building for emergencies.

“To their point about paying more, if the (home property) values go up, yes, they end up paying more,” Gonzalez said. “When the values don’t go up – like all those years when it didn’t go up at all or very little – they don’t pay for that either and yet they still get the service.”

The city has been the main driver of rising property tax bills since 2012 – accounting for half to almost two-thirds of the total tax increase for average value homes depending on the school district in which a home is located, an El Paso Matters analysis shows.

Chief Financial Officer Robert Cortinas said Monday the budget that was developed for next year took into consideration the council’s requests to reduce the impact on property owners while providing services to the community.

Cortinas said the budget includes funding for the completion of signature bond projects approved by voters in the 2012 quality of life bond including La Nube children’s museum and the Mexican American Cultural Center.

The budget will also fund street projects and public safety initiatives such as increasing staffing by adding two police and fire academies, continued funding for the police department’s crisis intervention teams, and information technology equipment and staff support for police’s body-worn camera program.

Cortinas said the city is being aggressive in the upcoming budget with employee compensation to remain competitive in the strained labor market. Those changes include increasing the minimum wage to $11.86 an hour effective May 2023 and providing lump-sum payments of $175 or $250 based on annual performance evaluation ratings.

The city will also increase service-time pay for long-term employees for every five years of service and will continue offering $1,000 sign-on bonuses as a hiring incentive.

Cortinas said the city is taking into consideration what costs must be addressed in the next fiscal year, while also preparing for future costs that may arise.

“These are things that we need to continue to focus on ensuring that we’re setting the city up for the long term and not making decisions today that are going to have a negative consequence in future years,” Cortinas said.

Elida S. Perez is a senior reporter for El Paso Matters. Her experience includes work as city government watchdog reporter for the El Paso Times, investigative reporter for El Paso Newspaper Tree and communities...