As most of you have noticed, the roosters have come home to roost and unfortunately, that means your taxes will be going up. We have known all along that the public policy agenda of spending taxpayer monies on dubious “feel-good” projects without clearly planning for paying for them was going to lead to massive tax increases and decreased services for El Paso. I have been warning you about the impending taxes and fees that are facing you today.
Much to the chagrin of the city council, especially those running for reelection, city manager Tommy Gonzalez let loose the sad facts; there is just not enough revenues to pay for the projects the council had put in play without addressing how they were going to be paid. No sooner had Gonzalez exposed the truth that the rhetoric started to ooze out of the politicians mouths.
That is all the politicians have to offer, rhetoric.
Remember when the water franchise fee was being discussed at city council. The mayor and city council created the illusion that it was a fee being applied to businesses – that it was not a tax. The fallacy is that it is the taxpayers that pay the fee. The taxpayers are a captive consumer who have to pay the “fee.”
Unfortunately it is much more insidious then that. The Public Service Board (PSB) is a city department although the rhetoric proclaims that it is not. The mayor sits on the board of the PSB. The city controls the PSB.
The politicians knew that implementing a water franchise fee to forestall a tax increase during the last budget cycle would eventually be paid for by the taxpayers. They knew that the businesses would point out that the “fee” is a tax and it needed to be equitably spread out through all of the water consumers, also known as the taxpayers of the city. That reality did not fit the political rhetoric so the politicians created the illusion that it would be paid for by the businesses in order to keep the controversy in check, but they knew that eventually they would be forced to acknowledge that it would be paid for by the taxpayers through their water bills.
As with all rhetoric, the idea was to quiet the controversy in the hopes that the truth gets buried when it eventually emerges.
On August 27, 2014, I wrote “City Manager and Taxes” where I clearly laid out for you that Tommy Gonzalez knew that the public agenda of spending money the city does not have was a failure. Gonzalez told the El Paso Builders Association that he had “never met a community that wants this much and that considers wants as necessities.” Gonzalez added that he was seeing a “culture of wanting without regard to paying for it.”
Last Tuesday, Gonzalez’ original comments were once again validated by the city’s incompetent city council.
After receiving the facts that the city’s revenues were not enough to meet the expenditures, city council, instead of working to manage the shortfalls, jumped right into creating the fantasy they have been peddling all of these years.
According to Maria Garcia at KVIA (City of El Paso: Revenue not keeping with expenses; March 31, 2015), the mayor stated that the figures presented to council were “basically the worst case scenario without any improvement.” Leeser was referring to the report “not taking into consideration any growth in property tax, sales tax,” according to his statement attributed by Garcia.
Cortney Niland was quoted by Maria Garcia as stating that the figures did not take into account the “$53 million in new revenue in just downtown to the general fund (,) 3500 new jobs” and the “highest hotel occupancy taxes in the state.”
Gonzalez reiterate that the city’s revenue growth “is meager.” The fact is that the city will likely be millions of dollars short as the city begins to tackle a new budget in June.
What was not even acknowledged by the political rhetoric is that about a third of the city’s budget goes directly towards paying down debt. That debt service will continue to increase in the coming years as more bonds are floated to meet the 2012 Quality of Life requirements. That is assuming that the ballpark subsidies do not increase because of declining HOT taxes after the bowling tournament has left the city.
There are already strong indications that this is likely to happen as airport traffic continues to drop at the airport.
The current budget cycle was bolstered by a water franchise fee that was pushed forth as only for businesses but in reality, it is a fee you are all now paying. The sad fact is that there is just no room left to add more fees to the wallets of the El Paso taxpayers.
There has to be a drastic cut in expenses and an increase in taxes just to meet the commitments made by the current public policy driving El Paso to ruin.
As there is an election, city council will muster all of their political rhetoric to keep this discussion out the public realm for now. However, the facts are the facts and there is simply not enough new money coming into El Paso to meet the debt service.
Any creditor would call that a consumer on the verge of bankruptcy.
The roosters have come home to roost in El Paso.