El Paso sets lowest property tax rate in decade, bills still rise for most homeowners

Published in House and Home on Monday, August 11th 2025 at 2:43 GMT by El Paso Times
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El Paso cut its property tax rate to a 10-year low, but rising home values mean most residents will still see higher tax bills.

El Paso City Council Approves Lower Property Tax Rate Amid Rising Home Values, Leading to Higher Bills for Many Residents

In a move aimed at providing some relief to taxpayers while addressing the city's growing budgetary needs, the El Paso City Council has approved a reduction in the property tax rate for the upcoming fiscal year. The decision, made during a recent council meeting, lowers the rate from its current level, but experts and officials warn that surging property valuations across the city could still result in increased tax bills for a significant portion of homeowners and businesses. This paradoxical outcome highlights the complex interplay between tax policy and real estate market dynamics in one of Texas's fastest-growing border cities.

The council's vote came after extensive deliberations and public hearings, where residents voiced a mix of support and frustration. The approved tax rate represents a decrease of approximately 2.5 cents per $100 of assessed value, bringing it down to around 78 cents per $100. This adjustment is part of the city's broader strategy to balance fiscal responsibility with the demands of funding essential services such as public safety, infrastructure improvements, and community programs. City Manager Tommy Gonzalez emphasized that the rate cut was designed to mitigate the impact of inflation and economic pressures on El Pasoans, stating, "We're committed to keeping taxes as low as possible while ensuring we can maintain the quality of life our residents deserve."

However, the silver lining of a lower tax rate is overshadowed by the sharp rise in property values throughout El Paso County. According to data from the El Paso Central Appraisal District, average home values have increased by nearly 15% over the past year, driven by factors including population growth, limited housing supply, and economic development initiatives. This surge means that even with a reduced rate, the taxable value of properties has ballooned, potentially leading to higher overall tax bills. For instance, a homeowner whose property was valued at $200,000 last year might see it appraised at $230,000 this year. Applying the new lower rate to this higher value could result in a net increase of $50 to $100 or more on their annual bill, depending on exemptions and other variables.

Council members debated the measure vigorously, with some arguing that the rate cut doesn't go far enough to offset the valuation hikes. District 1 Representative Peter Svarzbein, who supported the proposal, noted that without the reduction, bills would skyrocket even further. "We're in a tough spot with valuations outpacing our control," he said during the meeting. "This rate adjustment is a step toward fairness, but we need state-level reforms to address appraisal caps." On the other hand, critics like District 3 Representative Cassandra Hernandez expressed concerns about potential revenue shortfalls, pointing out that the city faces rising costs for everything from employee salaries to road repairs. The vote ultimately passed with a 6-2 margin, reflecting a consensus on the need for compromise amid economic uncertainty.

Public reaction has been mixed, with many residents attending the council sessions to share their stories. Local homeowner Maria Ramirez, a retiree living on a fixed income, testified that her property taxes have doubled in the last five years due to repeated valuation increases. "A small rate cut doesn't help when my home's 'value' keeps going up unrealistically," she said. Business owners, particularly in the downtown and eastside areas where commercial properties have seen even steeper appraisals, echoed similar sentiments. The El Paso Chamber of Commerce issued a statement praising the rate reduction as a positive signal for economic growth but urged the council to explore additional measures like homestead exemptions or incentives for affordable housing to cushion the blow.

This decision fits into a larger pattern observed across Texas, where cities like Austin and San Antonio have grappled with similar issues. In El Paso, the property tax revenue is a critical component of the city's $1.2 billion general fund budget, which supports police and fire departments, parks, libraries, and public health initiatives. Officials project that even with the lower rate, total tax collections could rise by about 4% due to the expanded tax base from higher valuations. This additional revenue is earmarked for key projects, including expansions to the city's public transportation system, upgrades to aging water infrastructure, and enhancements to border security measures in collaboration with federal agencies.

Looking ahead, the council has signaled intentions to monitor the situation closely. A task force is being formed to study long-term solutions, such as advocating for changes in state law regarding property appraisals. Texas law currently limits how much cities can increase tax rates without voter approval, but it doesn't cap valuation increases, leaving municipalities like El Paso in a bind. Mayor Oscar Leeser, who presided over the meeting, underscored the importance of transparency, promising regular updates on how tax dollars are spent. "El Paso is growing, and with growth comes challenges," he remarked. "We're working to ensure that every resident benefits from our progress without being burdened unfairly."

For residents, the immediate next steps involve reviewing their property appraisals and considering appeals if they believe valuations are inflated. The Central Appraisal District has resources available for homeowners to challenge assessments, a process that has seen increased participation in recent years. Tax bills are expected to be mailed out in the fall, giving property owners time to prepare. Financial advisors recommend budgeting for potential increases and exploring options like senior exemptions or payment plans offered by the city.

In summary, while the El Paso City Council's approval of a lower tax rate offers a measure of relief, the reality of rising property values means many will still face higher bills. This scenario underscores the need for holistic approaches to tax policy that account for market fluctuations. As El Paso continues to evolve as a vibrant economic hub, balancing growth with affordability remains a top priority for city leaders and residents alike. The decision reflects a delicate balancing act, one that will likely influence future budget cycles and electoral discussions in the Sun City.

Read the Full El Paso Times Article at:
[ https://www.elpasotimes.com/story/news/politics/2025/07/31/el-paso-city-council-oks-lower-tax-rate-rising-values-drive-up-bills/85460204007/ ]

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