Early voting is under way and one of the major hot-button issues for El Pasoans will be on the ballot – whether to increase the hotel/motel occupancy tax (HOT) by 2 percent to pay for the ballpark. It's the third proposition listed on your ballot. Some are mistakenly referring to it as "Proposition 3."

KFOX14 sat down with Deputy City Manager Bill Studer to go over the nuts and bolts of what your vote means.

Whether you want it or not, the city is building a baseball stadium and the HOT rate on the ballot allows the citizens to decide who will pay for it, El Pasoans or visitors.

"If you vote for it, it means that the hotel occupancy tax will be increased by 2 percent. That 2 percent will be used to pay off the ballpark bonds," said Studer.

"We are going to sell these bonds over 15 years, over that same 15 years we are going to pay off probably as many as we are going to sell," Studer added

If you vote 'for', the revenue generated from increasing the HOT rate by 2 percent will repay more than 70 percent of the bonds issued to build the ballpark in the first year and cover more of the funding costs each year after that.

"The advantage is that tourists, visitors to our community will pay the majority of costs for the ball park," said Studer.

It's how voters in cities across the country decided to fund the sports stadiums in their cities, like the Cowboys Stadium.

"When our citizens go visit in Houston or Dallas, they help pay for their facilities. This way, when people from Houston or Dallas come to El Paso, they will pay for ours," Studer said.

While it would make it the highest hotel occupancy tax in the state, sometimes referred to as a "bed tax," the average room rates in El Paso are cheaper than other big cities in Texas. Therefore, the overall cost to a visitor still remains significantly lower.

"Even though the bed tax, for instance, here would be half a percent higher than Houston is, the dollar amount of the bed tax would be significantly less," said Studer.

If you vote against the proposition, it will force the city to use money from the general revenue fund to foot the bill for the baseball park, using your tax dollars.

"If the vote carries on vote no, what you are basically saying is we don't want the visitors of this community to pay for it. We want the residents of El Paso to pay for it, because that's what will happen," Studer said.

With a hefty bill to pay, City Council will have to make tough choices on where your money gets spent.

"Every year when we start a budget process there is more request for dollars to spend than there are estimated revenues coming in," said Studer.

If HOT rate fails, and the city has to use money from the general fund, it leaves less money in the pot for the city's budget.

"Which means as you go through things that people want to spend money for, you either have to reduce those or you have to find other revenues to increase," said Studer.

Meaning, the city won't have the money to fund other projects and could lead to budget cuts.
While the general fund pulls money in from various entities including franchise fees from the electric and gas company and parking meters, two of the biggest sources of revenue for the general fund are property taxes and sales taxes.

If the city needs to generate more revenue to make up the difference for the loss in the general fund, it increases the possibility the city could raise property taxes and sales taxes.

That money wouldn't go directly to fund the ballpark, but rather to make up for the money the city had to spend on the ballpark because the HOT rate proposition failed.