“Just like a credit card, just ’cause you have it, you don’t need to continue to continue to charge on it. Sooner or later that credit card’s gonna blow up on you, and this is no different.” –Mayor Oscar Leeser, City Council meeting, August 31, 2021
Dear Friends and Media,
Today our City Council voted 6-2 to override the Mayor’s veto of $96M in certificates of obligation under agenda item 19, with Reps. Molinar and Rodriguez dissenting.
Thus the issuance was authorized only hours before it would have been rendered illegal by Texas HB 1869, which goes into effect tomorrow morning. The new law, contrary to Karla Nieman’s deceptive statement today, will prevent CO expenditures for quality-of life projects, of which $29.8M are funded by this new issuance.
Thus our outstanding CO debt now stands at over $730M, with nearly $400M in interest to pay on the principal, such that each El Pasoan now holds nearly seven times more CO debt, on average, than those living among the five largest Texas cities.
The supporters of the new issuance, which comes on the heals of a $93M CO issuance in April, showed themselves to be completely unqualified to manage our $1.06 billion budget, much less to make decisions about issuing hundreds of millions of dollars in new debt.
REP. PETER SVARZBEIN OF DISTRICT 1
It was painful watching Rep. Svarzbein, who is a photographer, debate Mayor Leeser, a highly successful businessman with decades of financial experience, on the question of issuing this debt.
The Mayor cited a recent report indicating that El Paso has the second highest property tax rate among the 50 largest American cities, and that El Paso’s population growth is stagnant compared to adjacent communities that have much lower property tax rates.
The CFO interjected that the same report shows that El Paso ranks 22nd for overall tax burden. But the CFO failed to mention El Paso’s low wages, which make our tax burden especially painful for struggling families.
Svarzbein suggested that people are leaving El Paso because of a lack of amenities and opportunities, when it is clear to most of us that large numbers of El Paso homeowners and professionals are moving to New Mexico and unincorporated communities in El Paso County to avoid our confiscatory tax rate.
Svarzbein also suggested that our City property tax, which he claimed is 26% of our total property tax bill, is not driving El Pasoans to flee. The Mayor was right to correct him. The figure is now 29%, thanks in large part to the property tax hikes Svarzbein voted for in August 2017 and August 2019. Our City tax has risen 38% since 2014, much faster than the four other taxing entities, so our City is guilty as charged!
Svarzbein asked CFO Cortinas how our CO debt has affected the City property tax rate, and the CFO responded that it has raised our debt-servicing rate by half a cent since 2017. But Svarzbein failed to ask him how our tax rate will be impacted by these recent debt issuances once the bonds are actually sold, as if $189M in new debt since April will not inflict any pain on homeowners.
We are not that stupid, Peter!
REP. CASSANDRA HERNANDEZ OF DISTRICT 3 PULLS THE RACE CARD
Rep. Hernandez, who like Rep. Svarzbein has voted for $504.8M in non-voter-approved debt, accused the Mayor of neglecting “communities of color” and “disenfranchised communities” because of his stated intention to veto excessive spending initiatives. The Mayor snapped back angrily and put her in her place, reminding her of his humble origins and his life-long commitment to philanthropy. True to form, Hernandez would not walk back her comments, and Svarzbein jumped to her rescue with some brainless comments of his own.
ENDLESS BORROWING AND SPENDING
Reps. Svarzbein, Hernandez and Rivera, the three biggest borrowers and spenders on City Council, made the usual argument that we “deserve” all the shiny new things funded by this CO issuance. Reps. Annello and Hernandez emphasized that the CO funds projects in neglected neighborhoods.
For them, the end justifies the means.
Don’t you wish you could spend as much as you want because you “deserve” it?
What about the crushing tax burden imposed on our underprivileged families and struggling retirees who are trying to stay in their homes?
Never mind…
JOE PICKETT LAUNCHES HIS FACEBOOK PAGE IN SUPPORT OF HIS RUN FOR DISTRICT 5
With her vote for more CO debt today, Rep. Salcido will have quite a challenge defending herself from Joe Pickett, who is a true fiscal conservative and an enemy of non-voter-approved debt. Mr. Pickett just launched his campaign Facebook page, moments ago.
It will also be interesting to watch Rep. Svarzbein defend his abysmal financial record against Commissioner Robinson in 2022.
Buenas tardes.
Max
CITY COUNCIL VIDEO, AUGUST 31, 2021: