County leaders: City isn’t “giving” county portion of sales tax

Last week, Mayor Dee Margo questioned why the city of El Paso has been giving the county a portion of its sales tax revenues since the 1980’s. A total of about $43 million this year alone.

ABC-7 now has the county’s side of the story. County Commissioner Vince Perez said the city isn’t giving a portion of its sales tax revenue to the county. He said that money was never the city’s to begin with.

At last week’s city council meeting Mayor Margo called the discovery “a revelation” stating: “For whatever reason our city government in 1987 determined that they were going to give a quarter of our sales tax revenues to the county. We’re the only city in the state of Texas where that occurs.”

The city forwarded ABC-7 an El Paso Times article published in 1987. It states that nearly 70% of voters approved a proposition to cut the county’s property tax rate in half by implementing a half percent sales tax.

“It was a voter approved opportunity for the county to have property tax relief,” County Judge Ruben Vogt said.

For example, currently sales tax revenue is capped at 8.25%, which means 6.25% goes to the state and 2% goes to local taxing jurisdictions. Commissioner Perez said before 1987, local entities only got 1.5%, but a law passed allowing an extra half percent. He said the county beat the city to the punch, by holding an election and allowing its jurisdiction to claim that piece of the pie. He said whether you’re shopping in the city or the county, the sales tax revenue is distribute like this: 1% to the city’s general fund, .5% to transit and .5% to the county.

“To characterize that the city has been paying the county money is just not correct,” Perez said.