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High sales tax revenue during pandemic surprises El Paso leaders

Puente
This story was produced as part of the Puente News Collaborative, a binational partnership of news organizations in Ciudad Juárez and El Paso.

(Editor's note: This story was produced with the support of the Puente News Collaborative, a bi-national partnership of news organizations in Ciudad Juárez and El Paso.)

EL PASO, Texas — Businesses in all corners of the economy suffering during the pandemic as the struggled to keep their staffs employed and doors open.

“It is definitely a year we would love to forget,” Elodia Perches, owner of Bridal Novias, an El Paso bridal dress store, said.

With wedding halls closed and large gatherings not allowed, many of Perches’ customers decided to postpone their celebration, and with it, their dress.

Bridal Novias lost 90 percent of their revenue in 2020. A harsh reality Perches had never encountered in the 39 years that Bridal Novias has been fitting brides for their wedding day.  

As vaccinations rolled out and restrictions on gatherings were lifted, Bridal Novias was able to earn some of their revenue back when customers rescheduled their weddings.

“We are so happy and thankful to the city of El Paso and Las Cruces and all of the surrounding towns because they have actually said, ‘Let’s shop local,’” Elodia explained.

But Elodia does say that they could be making more money if some of their most loyal customers were actually allowed to come to her store. Those loyal customers stuck behind a wall in Mexican cities like Ciudad Juarez and Casas Grandes unable to cross the border because of restrictions on non-essential travel that have been in place since March of 2020.

It has changed the way Perches is fitting her future brides. Instead of her customers coming to her store, Perches is taking her dresses to them in Mexico.

“I call myself 'Ella Blue Bird' now that I actually deliver baskets door-to-door,” Elodia said with a smile.

With Mexican shoppers being so important to El Paso’s economy, one would think that sales tax revenue would be suffering if those customers could not shop in the city’s stores. In fact, the opposite has happened.

According to city data, El Paso’s sales tax revenue continued to grow during the pandemic. The only time the city saw decreases were at the beginning of the pandemic and at the end of 2020. It’s important to note that El Paso saw an outbreak of covid infections and deaths in the winter of 2020.

In 2021, revenues have skyrocketed. For example, May of 2021 saw a 24.5 percent increase from May of 2020.

“We really bounced back quite quickly,” Robert Cortinas, CFO of the city of El Paso explained. “It’s pretty much a surprise to I think a lot of people.”

Cortinas says the money from federal stimulus checks are a main factor into El Paso’s success. The retail industry seeing the largest growth in sales tax revenue during the pandemic. That industry includes things such as clothing, building materials for home improvement, and automotive sales.

Cortinas also credits the resilience of El Paso. He says the economy is very strong and has a history of bouncing back in times of struggle, like during the recession in 2008.

“We don’t see the very high fluctuations but we also don’t see very low fluctuations,” Cortinas explained.

Unfortunately, these eye-popping numbers will not continue for long. Cortinas and his team suspect numbers will drop down to a normal level that the city is used to seeing.

If the border restrictions are lifted on Aug. 21, though, Cortinas says we could see an even longer term of high growth. Growth is what Perches is hoping for, but she will settle for a day when she can outfit her future brides with the most important dress they’ll ever wear right in her store.

“I want to remain positive and know that love is not cancelled and we are here to stay for the long run,” Perches said.

Dylan McKim

Comments

6 Comments

  1. “It has changed the way Perches is fitting her future brides. Instead of her customers coming to her store, Perches is taking her dresses to them in Mexico.” Isn’t that considered “non-essential” travel? Either way, crossing the border to buy or sell dresses!

          1. My former work. I am on restriction from visiting certain countries and within 100 miles of the Mexican border without a brief and debrief from D.O.E. No desire to travel to Juarez anyway.

  2. Regardless of the covid people made internet purchases which are taxed therefore no loss in revenue. UPS, FedEx and the USPS were very busy delivering the goods.

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