The two city representatives who are up for election in November made a failed last-ditch attempt last week to reduce the city’s adopted tax rate — drawing the ire of other council members.
City Reps. Isabel Salcido and Claudia Rodriguez were the lone council members to vote against adopting the city’s budget and tax rate Tuesday.
Their new stance came as a surprise to many, after Salcido and Rodriguez had joined city Rep. Cassandra Hernandez in penning an Aug. 1 essay in the El Paso Times that celebrated the rate that council adopted Tuesday.
“To show up at the very last minute and say ‘no we don’t approve of this’ is just disrespectful to this community and just everyone here today,” city Rep. Alexsandra Annello said of her colleagues’ failed effort to adopt what is known as the no-new-revenue tax rate. That rate is about 4 cents per $100 of property valuation lower than the rate adopted and would have created a $17 million budget shortfall.
Tuesday’s budget adoption came days after Salcido and Rodriguez launched their reelection campaigns, drawing multiple challengers for their seats. They are the only sitting council members on the November ballot, after Rep. Cissy Lizarraga declined to seek reelection and because Rep. Peter Svarzbein has served the maximum two full terms allowed by the City Charter.
By a 6-2 vote, the council on Tuesday set the property tax rate for the upcoming fiscal year at 86 cents per $100 in property valuation. Under that rate, a taxpayer living in an average-value home — appraised at $167,000 — would see the city portion of their tax bill rise by about $83 a year. Though lower than previous years, the adopted tax rate does not offset the spike in home values.
In the weeks leading up to the budget adoption, city officials, including Salcido and Rodriguez, misleadingly touted the lower tax rate as a tax reduction, or savings to taxpayers, despite the increase to homeowner’s property tax bills.
Salcido, during the budget meeting Tuesday, urged council to instead adopt the no-new-revenue rate of 82 cents per $100 valuation. That’s the rate under which the city would have collected the same amount of property tax revenue, excluding new construction, as it did this current fiscal year, when it ends this month.
Reading from a prepared statement, Salcido said that because El Pasoans have had to tighten their budgets, the city must do the same. Rodriguez supported Salcido’s motion to adopt the no-new-revenue rate, citing the impact the increased home values will have on tax bills.
Their motion failed 6-2.
“At this point to go to a no-new-revenue tax rate would be cutting into bone,” Svarzbein said.
Chief Financial Officer Robert Cortinas said adopting the no-new revenue rate would mean a $17 million cut to the budget. The tax rate proposed by city staff was lowered twice at the request of the City Council before it was adopted.
Reelection campaigns launch, votes change
Salcido launched her reelection campaign on Aug. 17 and faces two challengers for District 5, which covers Far East El Paso. Rodriguez launched her campaign on Aug. 14, drawing three challengers for the District 6 seat that covers portions of the East Side and Lower Valley.
Previous budget and finance votes always become big issues during elections, said Richard Pineda, chair of the communication department at the University of Texas at El Paso. He said any time that incumbents reaching the end of their terms radically change their positions just before an election, that it is a hard sell for constituents.
“I think it sounds good in the minute and probably yields a healthy soundbite to be able to say, ‘I stood up against this or I pushed back against this,’ but the hardest thing for an incumbent is that they essentially are running against opponents and they’re running against their record,” Pineda said.
Prior to launching their reelection bids, both city representatives voted in favor of previous budgets that included tax increases.
El Paso Matters asked Rodriguez and Salcido about the factors that led to their attempt to adopt the no-new-revenue rate despite multiple opportunities before Tuesday, and whether they think this is an issue that will be brought up in their campaigns.
“The proposed tax rate is just that, a proposal to start the annual budget process,” Salcido said in an email response. “City representatives are never bound to make a final decision based on how they voted on the initial tax rate as it was first introduced. If they did, what would be the point of public input?”
She said constituents would be discouraged from voicing their opinions if their representatives already made up their minds before going through the entire budget process and hearing from the public.
“It was clear after the first vote on the proposed tax rate (on Aug. 1), many residents I heard from wanted a lower tax rate,” Salcido said.
Salcido, who was elected in December 2018, has voted to approve the budget and tax rate every year since she was elected.
Rodriguez released a statement after Tuesday’s vote that said, in part, that she is continuing her commitment to constituents to be a “fiscally conservative” member of the council.
“The last previous two years I was able to push for no new spending, while holding the line with no new increases to the city portion of the tax rate to property owners and implement a host of savings to our senior citizens and military veterans,” she said in the statement.
Elected to fill an unexpired term in December 2019, Rodriguez was absent when council adopted the 2020 budget and tax rate and voted in favor of the budget and tax rate in 2021, both of which resulted in tax increases.
“Prior to Tuesday’s vote, multiple attempts were made to lower the tax rate, ultimately I did not get the result I wanted and this is why I favored a no new revenue rate. I take pride in being the fiscally conservative voice on council and welcome anyone who wishes to challenge my voting record,” Rodriguez said in an email response to questions.
A question of timing
The council in April unanimously passed a directive ordering City Manager Tommy Gonzalez and CFO Cortinas to develop a budget with a lower tax rate. Because of rising property valuations, the city was required by state law to reduce rates unless they sought approval from voters.
The first proposal introduced in June was a tax rate of 90 cents per $100 in property valuation, down three-fourths of a penny from the current year.
Under that proposed rate, an average value home would have paid about $150 more in city taxes next year.
Salcido issued a statement to media on July 14 that said she was asking council to look at options to reduce the tax rate further, but made no mention of the no-new-revenue rate.
In mid-July, the council unanimously approved an item brought forth by Salcido, Rodriguez and city Reps. Hernandez and Henry Rivera to further reduce the tax rate. The motion did not specify developing a proposal with the no-new-revenue rate.
In El Paso, residential values are rising much more rapidly than commercial and industrial values. That means that even if a government adopts a no-new-revenue rate, property taxes on homes generally would increase slightly, while taxes on commercial and industrial properties generally would decline slightly.
Cortinas, on Aug. 1, presented the lower tax rate of 86 cents per $100 in property valuation — about 4.5 cents lower than previously proposed. Both Salcido and Rodriguez voted to approve introducing that rate as the final one to be considered. Svarzbein was the only council member not to approve it.
Neither Salcido or Rodriguez made a motion at the time to direct the city manager or chief financial officer to consider a budget built around the no-new-revenue rate, or to identify budget reductions.
Also on Aug. 1, a guest column written by Hernandez, Salcido and Rodriguez published in the El Paso Times, largely touted how the city has not raised the tax rate in recent years and would be “reducing taxes and providing a saving for all residents by reducing the budget by millions.”
The column made no mention of considering a push for adopting the no-new-revenue rate.
Salcido and Rodriguez again did not raise concerns, or propose adopting the no-new-revenue rate, during the Aug. 16 public hearing ahead of Tuesday’s final budget adoption.