El Paso County is considering adopting a tax rate that would raise some property taxes about $100 a year to fund increased operation costs and pay raises for employees – including hefty salary boosts for county commissioners, the county judge and other elected officials.

El Paso County Commissioners Court on Aug. 28 could vote to adopt a tax rate of about 45.9 cents per $100 property valuation after holding a tax rate hearing on Monday – when only one person spoke out against the proposed increase.

Commissioners could also adopt a lower rate with less impact to taxpayers, as the county typically publishes the highest possible rate it could adopt without voter approval on its required public notice.

While the county tax rate will be adopted next week, it has until mid-September to tweak options and formally adopt the budget before the start of its 2024 fiscal year on Oct. 1.

Under consideration is a general fund budget of about $454.7 million for the next fiscal year – an increase of about $10 million over the current year, Aug. 14 county documents show. The general fund includes basic services paid for primarily through property and sales taxes and other revenue such as fines and fees. The all funds budget, which includes special revenue, debt and capital projects, is estimated to be about $566.2 million – about $12 million more than last year.

The proposed budget would fund employee pay raises, as well as new positions, increased costs for medical insurance and detention facilities contracts, and some capital improvement projects. About half the county’s general fund budget comprises programs or services mandated but not funded by the state, such as jailing state prisoners, public defender salaries and election costs, County Administrator Betsy Keller said.

“The budget is not just a finance tool, it’s truly a critical part of meeting our strategic expectations and delivering services to our community,” Keller told the court during an Aug. 14 budget hearing.

Salaries ‘significant investment’

At that same meeting, the court approved giving commissioners and the county judge a 16% salary boost – voting 4 to 1 to ensure that those increases be included in the budget it’s yet to formally adopt. 

Salaries for the four commissioners will go from about $114,900 to nearly $133,500 a year, while the county judge’s annual salary will increase from $131,500 to more than $152,700.

Commissioner Iliana Holguin voted against the pay raise, while Commissioners Carlos Leon, Sergio Coronado, and David Stout and County Judge Ricardo Samaniego voted in favor of them. The pay raises will be effective Oct. 1.

“I’ve never felt comfortable giving myself a raise and I am not going to do it,” Holguin told El Paso Matters. “Unfortunately, I seem to be the only one.”

Holguin said that the county a few years back studied county elected officials’ pay from across the state, and set a goal to reach about 80% of the statewide average. County commissioners and the county judge had been excluded from that formula for several years.

The 16% pay raise includes a 4.75% wage adjustment received by other county elected officials.

Coronado told El Paso Matters that the increase wouldn’t seem so high had commissioners received smaller pay raises each year to be on par with what elected officials in other Texas counties are paid.

“I want to make sure that across the board every year we do these adjustments in order to prevent these kinds of appearances when in reality it’s making up for years of no increases,” Coronado said.

County documents show that the commissioners and county judge did not receive pay raises in fiscal years 2021 to 2023, but did receive a salary boost of more than $20,000 in fiscal year 2020 – an increase of about 25%.

Commissioners at the Aug. 14 meeting also unanimously approved including the following in the budget:

• 4.75% pay increase for most general, executive and professional employees, raising the minimum wage to $14.39
• 4.75% pay increase for several elected officials, including the county tax assessor/collector, county clerk, county attorney, district clerk, justices of the peace, constables and the county sheriff
• 1% flat-rate increase for retirees
• $1.6 million for urgent capital needs

“We wanted to make sure we were fair with our employees,” Coronado said. “We want to be an organization where people actually want to come and work with us. In the long run, that really benefits the taxpayer because the less turnover we have, the less resources we have to spend on training people.”

The district attorney’s salary, which is calculated under state statute, will remain at $198,000. The state funds the majority of that salary, with the county contributing about $58,000. State statute also sets pay rates for several judgeships and other elected officials.

Keller said the county is still finalizing salaries for the deputy constables, and is looking to wrap up its collective bargaining agreement with sheriff’s officers later this week.

The county would also pay more toward employee health care, which Keller said “ is a significant investment in our county employees that limits the increase to their premiums to 2% and offsets family costs.”

Reserve funds, bond debt 

While those salaries were approved, other aspects of the budget remain uncertain as they depend on fluctuating sales tax revenues and the reserve fund balance for the calendar year.

The county aims to have an unallocated reserve of between 10% and 15% of the total budget, though it’s estimating its reserve fund at 8% in anticipation that it would bump up a few percentage points by year’s end. The county needs about $33.5 million in the fund to meet the 10% goal. It currently stands at under 5% with about $21.6 million, county documents show.

Keller said several initiatives could be held off until those figures are finalized at year’s end. Saying she’s not “optimistic this year,” Keller recommended money set aside for several new positions, step salary increases and some capital improvement projects could instead be transferred into the reserve fund if it falls short.

A strong reserve fund helps the county maintain good bond ratings, which in turn helps it issue debt for future projects.

The county is planning to send a general bond of about $100 million to voters in 2024 for quality of life projects, which if approved could lead to tax increases starting in the 2025 tax year. That will follow the $100 million in debt commissioners court approved in January using certificates of obligation and tax anticipation notes – debt instruments that don’t require voter approval. 

Tax rate scenarios

Over the last several weeks, county staff presented several budget and tax rate scenarios to the commissioners court.

Among them is the proposed 45.9 cent rate, which is the county’s voter approval rate – the highest the court may adopt without seeking voter approval. Under that rate, the owner of a $182,259 average value home in the county would pay $836 in county taxes – $104 more than last year, county documents show.

Commissioner Holguin during an Aug. 7 meeting was the sole member of the court to vote against publishing the proposed voter approval rate in the required public notice, saying she didn’t approve of the county’s policy to publish the highest possible rate. Commissioner Leon was not present for that vote.

“I think that we miss an opportunity to really send a clear message to the residents in the county that we don’t want to go with the highest rate possible just because we can,” Holguin told El Paso Matters.

The voter approval rate would create $34.4 in additional revenue, county documents show, including $14.7 million which could go toward capital projects; $2.7 million toward new positions; $3.5 million toward step increases; and $13 million for the fund balance. 

Commissioners court could also adopt a lower rate, including the no-new-revenue rate of 40.2 cents per $100 property valuation that would translate to an increase of about $21 a year on the county’s portion of the tax bill on an average value home. The no-new-revenue rate refers to the rate needed to collect the same amount in property taxes as the previous year on the same properties.

The county’s current tax rate is 42.6 cents per $100 property valuation, which the commissioners court could also adopt as the new rate. That would translate to an increase of about $45 more a year in county taxes on the average value home.

The exact impact on individual homeowners would depend on their property valuations, which have increased significantly the past few years.

Coronado said that while he couldn’t yet commit to what tax rate he would favor, he doesn’t believe the county could properly operate at the no-new-revenue rate.

“We just can’t keep up with the same services, the same requirements, the same requests from not just our employees, but the cost of the maintenance, the cost of buying goods and  providing the services – everything just keeps going up,” he said. “This year’s dollar doesn’t buy the same as last year.”

If a county tax increase is approved, it could be offset by expected decreases to the school districts’ portion of homeowners’ total property tax bill. That’s because of statewide property tax cuts that among other things increase school district homestead exemptions – the amount of a property value that is not taxed – from $40,000 to $100,000.

School boards for districts across El Paso approved their budgets this summer and have adopted or are soon voting to adopt their respective tax rates.

The tax relief bill signed by Texas Gov. Greg Abbott in July goes before voters on Nov. 7 and if approved would apply for the 2023 tax bills that go out to property owners in January. School district taxes in El Paso have accounted for more than 40% of a homeowner’s total tax bill the past several years, with city taxes making up about 30% and county taxes about 15%, county documents show.

Correction: The chart above has been updated to note the salary for constables. A previous version incorrectly cited them as deputy constables.