EL PASO, Texas (KTSM) – Over $14 million in sales taxes were tallied by businesses in El Paso during 2021, a big increase in revenue for the City of El Paso compared to the year before.
During 2021, sales tax revenue increased by just over $14 million compared to the previous year, according to a city presentation. In total, the city brought in $111.6 million in sales tax revenue compared to $97.6 million in 2020.
The 14 percent increase in sales tax revenue can be attributed to more spending at businesses in El Paso as COVID-19 restrictions were scaled back during the year as more individuals became vaccinated.
The increase in sales tax revenue is more than the three previous years’ totals, according to city-data. And, economic trends indicate 2022 may follow the same pace as the previous year.
The beginning of the 2022 fiscal year began in September and the first quarter ended in November. During that time, the city recorded $30.5 million in sales tax revenue, just over $5 million compared to the previous year.
The boost appears to accompany increases in international bridge crossing revenues recorded at toll booths. Tolls collected at international bridges are outpacing figures from last year, according to city data.
Many local and chain businesses receive business from Mexico and shoppers from neighboring states. Last November, the U.S. government reopened crossings to non-essential travel from Mexico after it had been stopped for over a year due to the COVID-19 pandemic.
The city recorded $2.4 million in bridge toll revenue compared to $1.7 million the previous year in November.
But while initial numbers look promising, financial experts are looking to see how the latest surge in COVID-19 cases throughout the United States and city will impact economic trends.
Diane C. Swonk, a chief economist for Grant Thorton, an accounting and advisory firm in Chicago, wrote in an article two scenarios are likely. One, the spread of the omicron COVID-19 variant is short lived and economies adjust. Or, two, it continues and puts a strain on the labor market.
“It is hard to imagine a sector that will be unaffected by
staffing shortages. Thousands of flights have already
been canceled. Restaurants are closing,” she wrote. “Fire departments don’t have enough workers to respond to emergencies in hot spots. State and local government offices are closing. Many school districts have delayed reopening to ensure students get negative tests. They will face challenges staying open given staffing shortages and outbreaks.”