by Max Grossman
According to today’s issue of the Paso del Norte Economic Indicator Review of the Hunt Institute for Global Competitiveness, “the El Paso Office of the Western District of Texas U.S. Bankruptcy Court recorded 318 bankruptcies—including Chapter 7, Chapter 11, and Chapter 13 cases—from January 2023 to March 2023.”
That is an increase of 78 bankruptcy filings (32.5%) over the same period last year.
In March 2023 alone, El Paso businesses filed for 130 bankruptcies, which is 44.4% more than the previous month and 39.8% more than in March 2022.
The Western District of Texas is one of four federal judicial districts in our state and extends from El Paso to Austin, San Antonio and Waco:
Within the Western District, San Antonio saw the second highest increase in bankruptcies (after El Paso) in January to March 2023 compared to the same period last year: 7.3%.
By contrast, Austin (-0.5%) and Midland (-2.4%) saw a decrease in bankruptcies.
The Economic Indicator Review also tells us that El Paso lost 300 jobs from February to March while Las Cruces, which has a population six times smaller than El Paso’s, gained 1,600 jobs in the same period.
WHY ARE EL PASO BUSINESSES SUFFERING?
Local businesses are being pressured by inflation on the one hand, and by high taxation on the other.
The City has raised its portion of our property tax for eight years in a row and now accounts for 29% of our total property tax bill, as it continues to issue hundreds of millions of dollars in new debt without voter approval while gifting huge tax incentives and abatements to major developers.
The City levies ever higher (illegal) taxes on our water bills and has raised its fees for just about everything else, from permits to parking meters, hurting businesses and individuals alike.
Businesses have never paid higher property taxes and fees than they do today.
Because the population of our city continues to decline (as of 2021 we are down to 678,422 residents from our peak of 683,583 in 2017), the number of potential business customers has declined as well.
Meanwhile, City Manager Gonzalez, CFO Robert Cortinas, and City Rep. Cassandra Hernandez are cheering about an introductory bond rating from a rating agency no one has heard of and bragging about their financial acumen!
I bet the 318 El Paso entities that declared bankruptcy between January and March are less optimistic.
Of course, not every business that closes files for bankruptcy. Some just close the doors.
When bankruptcies go up, tax revenues got nowhere but one way to go, huh?