Texas border sees bump in sales tax revenues despite COVID-19 travel restrictions


McALLEN, Texas (Border Report) — Despite Title 42 travel restrictions still in effect on the Southwest border, sales tax revenue figures for border cities and counties within Texas increased in August almost border-wide and that means more money for border communities this month, according to new data released by the Texas Comptroller’s office.

Sales tax allocations for October, which are based on sales tax revenue from August, show cities and counties statewide will get a revenue increase of about 20%. But on the border, most cities will receive an even bigger increase because of a bump in sales taxes during August.

That’s encouraging news for border communities that have suffered under travel restrictions — imposed in March 2020 under the Trump administration and extended through the Biden administration to help reduce the spread of coronavirus.

From El Paso, in West Texas, to the Gulf Coast city of Brownsville, border cities, on average had a 23% increase in sales tax revenues in August, the Texas Comptroller reported this week. Some border sales tax allocations include:

  • McAllen is getting a 23% increase from August 2020 and will receive $6.3 million, up from $5.2 million.
  • Laredo: A 23.4% increase and getting $3.9 million, up from $3.2 million.
  • Brownsville: A 23% increase and getting $3.95 million, up from $3.2 million.
  • Presidio: A 36% increase and getting 41,066, up from $30,111.
  • Eagle Pass: A 22.8% increase and getting $445,291, up from $362,445.
  • El Paso: A 16.5% bump and receive $9 million, up from $7.7.
  • Roma, in Starr County: A 3.7% increase and getting $114,134, up from $110,056.

There were some exceptions, however.

The South Texas city of Del Rio had only a 1% increase in sales tax revenue in August. However, that number is expected to greatly increase for September sales tax figures because that is when thousands of law enforcement and federal agents, journalists and volunteers descended upon the remote border town as a caravan of mostly Haitian migrants camped under the international bridge and brought worldwide attention to the city with a population of just 35,000.

ABOVE LEFT: An estimated 15,000 migrants, mostly Haitians, camped under the Del Rio International Bridge, as seen from atop the bridge on Sept. 17, 2021. RIGHT: A National Guardsman patrols the entrance to the bridge on Sept. 17, 2021. (Sandra Sanchez/Border Report File Photos)

Rio Grande City in Starr County saw a decrease of 5% in sales tax figures, which some attribute to Operation Lone Star, a program in which Gov. Greg Abbott has surged hundreds of Texas troopers to border communities to combat a surge in migrants.

Starr County Judge Eloy Vera earlier told Border Report that the presence of added troopers deters some residents from venturing to shop because many are low-income and have older vehicles, some not in compliance with state laws, and they don’t want to risk getting a ticket.

An examination by Border Report of tickets issued by Department of Public Safety troopers and other law enforcement found a disproportionate number of citations issued in Starr and Hidalgo Counties due to the increase in state troopers.

On Sept. 20, Abbott announced a $100 million grant program affiliated with Operation Lone Star to border communities to help enhance security as well as funds to border communities.

“This program will strengthen our response to the crisis at the border and help keep our communities safe,” Abbott said in a statement.

Texas Gov. Greg Abbott is surrounded by nine other governors on Wednesday, Oct. 6, 2021, at Anzalduas Park in Mission, Texas, on the banks of the Rio Grande. (Sandra Sanchez/Border Report)

During a visit to the Rio Grande Valley on Wednesday, along with nine other governors from across the nation, Abbott reiterated his support for Operation Lone Star and said Texas communities are bearing the fiscal brunt of border security, which he calls a federal responsibility.

“Texas and other states are taking action to do the federal government’s job,” Abbott said.

The state had applied to the Federal Emergency Management Agency for emergency funds citing the border crisis but was rejected by the Biden administration. On Thursday, Abbott sent a letter to President Biden to appeal the denial of funds.





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Lost airline revenues tip of the iceberg for domestic testing


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  • New testing requirements for international travel to the United States has reduced overall travel.
  • Possible domestic testing restrictions could impact airline revenues by $6 billion quarterly, adding additional costs beyond those addressed by the CARES Act.
  • The long-term damage would further be felt through the uncertainty of travel domestic restrictions would bring to the flying public, further delaying the recovery and setting travel back to 20% of 2019 levels.

Through the myriad of challenges facing the airlines of the United States in the middle of the greatest downturn in air travel history comes a new question to be answered: What would mandatory COVID-19 testing for domestic travel do to the fragile U.S. airline industry? The testing for passengers bound for the United States from international departure points foreshadows the cost.

On January 12, 2021, the outgoing Trump Administration announced the new requirement in an effort to increase traveler confidence and later mandated as a means to curb the spread of new variants of the virus. The new testing requirement was followed by an immediate drop in air travel.

Related: The airlines are forked. Business and leisure flying split can heal

The U.S. air travel recovery, as followed daily through the now-familiar TSA daily screenings, abruptly reversed course from its gradual ascent to a weekly average of 47% of 2019 numbers in mid-January, to a new seven-day average of 35% by February 1. This 12 percentage point drop is especially impactful considering how little the total percentage the number of international travel represents.

With only 10% of all U.S. travel in 2021 anticipated to be international, the precipitous drop in demand following the announcement of testing requirements suggests a more damaging trend to the airlines than originally anticipated. The international component affecting overall traffic more than its share is creating a problem for airlines and lawmakers, alike. International travel is far more impacted than originally anticipated by the testing requirements. Additionally, the new order is having a negative effect on the confidence for consumers to book all travel, both international and domestic.

Now, with the amplified discussion of duplicating the international testing requirement to also apply to domestic travel, the incremental impact to an already fragile aviation industry has yet to be examined. Airlines and plane makers have submitted criticisms of the viability of a domestic testing requirement and its effectiveness at reducing viral spread as other methods of transportation continue unrestricted. As the debate continues, TAC Analysis looks deeper into the economic impact this could have on the U.S. airlines.

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2021 Travel & Tourism revenues expected to be $200 billion less than in 2019


Second wave of COVID-19 pandemic brought a new hit to travel and tourism businesses and slowed down the recovery of the entire market

The COVID-19 pandemic has affected every sector globally, but the travel and tourism industry is among the hardest hit. Although hotels and resorts implemented increased safety and sanitation measures and cautiously reopened in the second half of 2020, the second wave of the pandemic brought a new hit to businesses operating in the sector and slowed down the recovery of the entire market.

According to the most recent data, the combined revenues of the travel and tourism industry are expected to reach $540 billion in 2021, almost a $200 billion plunge compared to 2019 figures.

Post-COVID-19 Recovery to Last for Three Years

In 2017, the entire travel and tourism sector generated $688.5 billion in revenue, revealed the survey. Over the next two years, this figure jumped by 7% and hit $738.8 billion.

However, the year 2020 triggered the biggest market contraction in history. Countries across the globe imposed lockdown rules to curb the spread of the virus, leading to thousands of canceled vacations, and closed hotels between March and May. Although many of them lifted off travel restrictions in the second half of 2020, it wasn’t enough to cover colossal revenue losses produced in the first two quarters of the year.

Statistics show the travel and tourism industry’s revenues plunged by 52% to $348.8 billion amid the COVID-19 crisis. The data also indicate it will take years for the entire sector to recover from the effects of the coronavirus pandemic. In 2021, revenues are projected to grow by 54% year-over-year to $540 billion, 26% less than in 2019.

The year 2022 is forecast to witness $666.1 billion in revenues, still $72.7 billion below pre-COVID-19 levels. By the end of 2023, travel and tourism revenues are expected to rise to $768.4 billion.

As the market’s largest segment, the hotel industry is forecast to generate $284.7 billion in revenue this year, 22% less than in 2019. The package holidays segment is set to reach a $171.4 billion value in 2021, an $87 billion plunge compared to pre-COVID-19 figures. Vacation rentals and the cruise industry follow with $66.9 billion and $16.8 billion in revenue, respectively.

The Number of Users to Grow by 46% YoY to 1.8 Billion, Still 26% Below Pre-COVID-19 Levels

The survey also revealed the number of users in the travel and tourism sector halved amid the coronavirus pandemic, falling from 2.4 billion in 2019 to 1.2 billion in 2020. Although this figure is expected to rise to 1.8 billion in 2021, it still represents a 26% drop compared to pre-COVID-19 levels.

Statistics show the number of users in the cruise industry is forecast to reach 17 million this year, a 41% plunge in two years, and the most significant drop among all market segments. The package holidays segment is set to reach over 335 million users in 2021, 37% less than in 2019. The hotel industry follows with a 24% drop in two years and 845.7 million users as of this year.

Analyzed by geography, the United States represents the largest travel and tourism industry globally, expected to reach $104.5 billion value this year, $40 billion less than in 2019.

The revenues of the Chinese market, as the second-largest globally, are forecast to jump by 67.5% year-over-year to $89.3 billion in 2021, still $30 billion below pre-COVID-19 levels. Germany, Japan, and the United Kingdom follow with $45.8 billion, $29.3 billion, and $26.7 billion in revenue, respectively.



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