City of El Paso considering a sales tax for utility services

The City of El Paso is considering a new sales tax on utility services, which could help it generate an additional $3 million in tax revenue.

PROPERTY TAX RATE

At a special meeting Monday, El Paso City Council was shown a draft of the 2019 budget, updated with newly-certified property valuations.

The preliminary budget called for a tax rate increase around 4 cents per $100 of home valuation. That comes out to a $40 increase in property taxes for every $100,000 your home is worth.

City of El Paso Chief Financial Officer Robert Cortinas said the City was expecting a 2.9 percent increase in taxable property, based on the valuations conducted every three years. The City has learned the figure is closer to 4 percent, Cortinas said.

That means your property is probably more valuable: The average single family home in El Paso went from around $124,299 to $129,915.

“The city is growing, values are growing,” said Cortinas. “Something we’ve talked about with the Council. Overall, its encouraging to see that growth.”

PROPOSED SALES TAX ON UTILITIES

A one percent city sales tax on utilities was also proposed.

“That’s something I’m actually okay with,” said El Paso City Representative Claudia Ordaz. “That’s additional revenue that we can bring in.”

On August 29, 1978 the City repealed sales tax on gas and electricity, putting El Paso on the list of 141 cities in Texas to do so.

Cortinas told Council that can be changed with a city ordinance, something he said is being drafted.

Should it pass, Cortinas estimated it would bring the city more than $3 million dollars, which he proposed allocating to the Fire Department.

The proposal sparked a discussion among city leadership, many of whom stated they would like to see the surplus in funds be applied to road maintenance.

“The last study that was done was in 2009,” said Ordaz. “Almost 10 years later, there’s been more wear and tear on our streets.”

Both options are in line with the top priorities for the city which are streets, public safety and parks.

The City plans on investing $15 million more in police and fire, and $7 million in street improvement.

Council plans on approving the budget on August 21st. There will be public hearings on the proposed property tax rate on August 7th and 14th.