Mónica Ortiz Uribe of the El Paso Times just published a long and interesting report on Texas’ regressive tax system, which disproportionately impacts low-income residents of our state. There are several very important points that she brings up in the course of her discussion, and each of these deserves a separate investigation by our media:
1. A total of 18 City projects that were supposed to be paid for from the $473,250,000 of the 2012 Quality of Bond were $58 million over budget. The shortfall was covered by certificates of obligation that were authorized by City Council without voter permission. Of course, the $58 million does not include the financial debacle that is the “Arena,” which would require more than $300 million in additional funds if the City were to proceed with it.
2. El Paso has the second-highest property tax rate among the 50 largest U.S. cities, according to a key study by the Lincoln Institute for Land Policy. The El Paso Times has cited this fact several times over the last few months.
3. El Paso’s debt per capita is the highest among large cities in Texas. Every man, woman and child in El Paso would need to pay $2,071 in order to extinguish our $1.4 billion in tax-supported debt.
4. According to data from the 2019 Census, El Paso’s median household income ($48,542) was 24% less than the Texas median household income ($64,034), making our City’s tax burden especially painful for working families.
5. Fitch Ratings gives the City of El Paso a favorable AA credit rating, but the agency warned in a 2019 report: “The city’s long-term liability burden is moderate but has been trending higher. Further increases in the components of this key driver that push the metric much beyond 20% could produce an overall credit profile inconsistent with the current rating and lead to negative rating action.” Our long-term liability burden (debt divided by median resident income) was 18.5% as of 2017. Soon we will be kissing our AA rating goodbye.
Our City CFO Robert Cortinas often brags about the City’s financially responsible policies, even though his strategies rely on issuing bonds to pay for projects that should be covered by our general revenue budget.
Enjoy your day.