In Border Patrol housing community, Presidio sees lost taxes

PRESIDIO — A few years ago, Presidio Mayor John Ferguson went to a grand opening party at a gated community for Border Patrol agents on the city’s northside. That got him thinking: Why weren’t these homes contributing to the tax base?

“These are some of the nicest homes in Presidio,” Ferguson said of the compound near Erma Avenue and U.S. Route 67. But since they sit on federally owned land, they don’t pay into city coffers.

It’s a question that has vexed city leaders for years — and one they’re determined to fix. So far, though, Presidio leaders say they haven’t been able to get just compensation from the federal government.

That’s a problem, says City Administrator Joe Portillo, because homeowners are typically a big part of how cities in the Lone Star State fund themselves — and because Border Patrol agents living in the compound use services like police and utilities.

“In Texas, the way cities raise money is from property taxes,” he said in an interview last week. “When you have homes that aren’t paying for property taxes, it affects our bottom line.”

The city is in a similar position with the local schools, which provide tax-empty homes to teachers, Portillo said. And he stressed that his gripes weren’t with Border Patrol agents themselves, who he said were good neighbors.

Instead, he simply wants someone – like the Department of Homeland Security – to reimburse the difference in lost property taxes. That’s only fair, he said, because agents living in the compound benefit from city services.

“If you had an emergency in your house, would you expect EMS to show up?” he said. “Yes, you would.”

The federal government started building the housing compound in Presidio in the 1990s, after deciding the existing housing stock wasn’t adequate for Border Patrol agents.

The first 34 homes were built between 1999 and 2002, said Daniel Bryant, a spokesman for Customs and Border Protection. In 2013, the federal government built 29 more homes for a total of 63 houses. That’s no small change for a city with just over 4,000 residents, according to U.S. Census Bureau figures from 2017.

Presidio leaders hope they can find an arrangement similar to the one Brewster County has with the U.S. Department of the Interior. The agency reportedly pays the county around $1.2 million every year to compensate for Big Bend National Park, which takes up over 1,200 square miles in the south edge of Brewster County.

But Bryant, the CBP spokesman, said federal properties “cannot be taxed by law.” Instead, he suggested the city apply for the Federal Impact Aid Program, which helps compensate local governments and school districts for lost money due to federally owned and tax-exempt properties.

Portillo says the city is aware of the program. But when PISD applied for the program, he said the district wasn’t “getting a lot from it.”

City leaders also tried speaking to Congressman Will Hurd, who reportedly told Presidio that the U.S. Department of Homeland Security — the parent agency — didn’t have a mechanism to compensate the city. (Hurd’s office didn’t respond to a request for comment.)

While the city looks for solutions, though, leaders in Presidio city and county broadly agree on the need for compensation.

“We supply all the infrastructure for the government housing, just like anybody else who pays taxes,” said Brad Newton, executive director of the Presidio Municipal Development District. “It’s not really fair to the taxpayer for the federal government to not pay their fair share.”

At a city council meeting last month, Rod Ponton, county attorney for Presidio County, met with city leaders to discuss the issue.

“Everybody’s focused on all the problems in Presidio and the need for more revenue for the city to function better,” Ponton told the council during the October 23 meeting. “One of the biggest issues is, we have so many federal residences here that don’t pay any taxes.”

Ponton was joined by John Huddleson, chief appraiser for Reeves County Appraisal District. The two men agreed that — since the federal properties in Presidio were used as private homes — they were not in fact tax-exempt.

“If a property is owned by a government or church or nonprofit and they lease it to somebody for a regular lease, then it becomes taxable property,” Ponton said. “All the federal properties are taxable here because they’re being rented.”

The men’s solution was simple: Local leaders should simply appraise the buildings and try to tax them. “The best way to negotiate with [the federal government] is to send them a tax bill,” Ponton said.

Huddleson agreed, saying: “That’ll get their attention real quick.” But he acknowledged the plan was “very preliminary” and that the government could “of course” challenge any local tax bills in court.

Huddleson said the process of appraising and taxing the Border Patrol complex could take months. But if Presidio succeeds, it’s still unclear who, exactly, will get the bill.

Although the land is federally owned, the housing is managed by a rental management company, according to City Administrator Portillo. A spokesman for Border Patrol didn’t respond to requests for comment by press time.

In an interview with The Presidio International, Mayor John Ferguson said the city was considering taxing these properties because past efforts to seek reimbursement from the federal government hadn’t “moved the ball forward at all.” Like Portillo, though, he stressed that his grievances weren’t with Border Patrol employees.

“I am absolutely not faulting the people who live here,” he said. “But the way the system is set up makes it hard on us.”