Taxes are killing the local economy.
Taxes hurt small businesses two ways. First, our punitive tax rates take a big chunk out of a business’ bottom line. Businesses might have used that money to expand, to hire more workers, or to create a completely different business.
Second, the money El Pasoans pay in taxes is money that potential customers or clients might have spent at a local business. Every dollar that you spend in taxes is money that you’re not spending to fix your roof, or get your car washed, or eat at the Tap.
And we can’t get new businesses to move here without offering them tax incentives, because our tax rates are so high new businesses would rather move somewhere else.
And then if a new business moves here, it doesn’t contribute anything to the General Fund, because of the tax incentives it took to get them here, and residential taxpayers end up pick the short end of the stick.
Taxes are killing the local economy. If I get elected, lowering taxes will be my priority.
Pardon me for disagreeing with you, but El Paso has the lowest unemployment rate it’s ever had or close to it. The economy is actually doing quite well right now. While it may be true that money paid in taxes is possibly money not spent locally in the private sector, where’s the data on this? Regardless, the reason for the recent death of so many small businesses in El Paso is the same as for elsewhere: 2+ years of COVID. And frankly, if you think businesses won’t come to El Paso solely because of our tax rates, not sure how you can explain that the most successful businesses in the world tend to locate in high tax locations, like the San Francisco Bay Area, to name one. It takes a lot more than low taxes to attract world class companies. Claiming our city is doing poorly when hourly wages are the highest they’ve ever been, property values are going up, and more people are employed than at any time in the last 30+ years is not a winning formula. I respect your love of and loyalty to El Paso, which I share, but this town is not doing as poorly as you make it out and things like the trolley and quality of life initiatives are what we’ve lacked for so long. I’m perfectly willing to pay for more of these things.
Thank you for your thoughtful and insightful reply.
And of course I welcome you disagreeing with me. When everyone agrees, things go south.
I find it interesting that you compare El Paso to Silicon Valley. Hmm, are there any differences between Silicon Valley and El Paso besides tax rates? I think so. Maybe the tax rates follow economic development, and not the other way around.
When El Pasoans are fleeing a punitive tax structure and an arrogant city government, the people who stay will make more, because a static pie will be divided into fewer slices. That’s not economic development. That’s crony capitalism.
I’d like to continue this dialogue, but you ‘ll have to bring better arguments.
And let’s not confuse macro effects with micro policy. What do you think has a bigger effect on our local economy, the exchange rate of the peso, or water parks?
I enjoyed this very thoughtful exchange between you and the other commenter. I think you both have some good points. I’m responding not to argue, but because I want to see you on Council and I believe you can do great things when you get there.
Regarding your point about people in El Paso making more money because others are leaving, I’m not convinced this would be good for those who stay behind. Most local businesses make their money from customers who also live in El Paso, and a shrinking population means fewer people to buy the homes that homebuilders build, fewer people to eat the food that restaurants serve, fewer people to buy the cars that car dealerships sell, etc. And the few El Paso companies that make most of their money outside El Paso would hardly benefit either. Helen of Troy won’t sell more beauty products in Ohio if more people leave El Paso. On a long-term basis, it might actually hurt them because attracting top talent to El Paso will be even harder. But of course they’d move those jobs to another city long before things got to that point.
And to your point about taxes and corruption. I agree that high taxes and a corrupt government are a problem, but I don’t think they’re the main reason people are leaving El Paso. I grew up in El Paso, left for college, and have moved back and then moved away again a few times in the decades since. I’ve kept in touch with a few of my high school classmates, but since social media came along I’ve reconnected with several of them. The really ambitious ones left after high school and never came back. A few went to UTEP, then left, and never came back. I doubt if most of them could name a single member of Council or have any idea what the property tax rate is. They mostly left El Paso due to lack of job opportunities, with quality of life being a close second. And from the conversations I’ve had, most of us define quality of life in the same way you and I do. Not like the City Manager does. That’s to say, lots of local restaurants, bars, concert venues, public art, beautiful parks, unique cultural attractions, etc. The things El Paso tends to lack, and the City isn’t doing much to promote.
As the other commenter mentioned, big companies tend to cluster in cities like New York, San Francisco, Chicago, and Los Angeles. Places with high tax rates. And the recent snafu on the Los Angeles City Council showed the world that even the biggest, richest cities are run by people no smarter than the ones that run El Paso. So I suppose my point is, corruption and taxes are problems, but fixing those alone won’t stop the brain drain. And if we get our act together on real quality of life, not the generic bullshit being pushed by City Hall, people might be willing to tolerate high taxes, and El Paso could still thrive even if we get stuck with some incompetent, corrupt elected officials from time to time.
Anyways, I know it’s been a long message. Didn’t mean for it to turn out this long winded. My best to you on Election Day. I relocated earlier this year to be closer to out of town family, although I’ve told everyone I know in El Paso to vote for you if they’re in your district.
I have to agree with Joel and was actually putting together some numbers. First of all, I have the utmost respect for the initial response from “David W.” This is no way demeans his love and actually, ALL of our Love for El Paso. Like Joel, I moved away. I actually went to college in San Jose, before it was called Silicon Valley and the Woz of Apple fame was going to night school at my college. The reason companies relocate or our founded in certain parts of the country is access to talented employees. The “Silicon Valley’s” start was in 1956 when William Shockley (con inventor of the transistor) moved from NJ to Mountain View. Out of that came Fairchild, Intel, and many others. The Bay Area was also home to numerous government facilities and research labs. Out of the Ames research center, came the precursor to NASA. Arpanet became the Internet. Varian Associates was established to help the military on radar. On op of that, Stanford was graduateding numerous engineers and visionaries. The first being the founders of Hewlett Packard in 1936. At the Stanford Research Park, thermal jet printing was developed for home printers. Xerox was actually the inventor of the technology that Apple came out with. The mouse and graphical user interface for one. After that came the explosion of companies such as Facebook, Google, etc. But, why do I mention all this? Is that El Paso does not have this kind of talent or cluster of technology and never will. UTEP is a fine school but it is not an incubator for business. El Paso is basically a poor city with limited career opportunities. The poverty rate stands at 21% while Texas’ is at 14%. Between 2010 to 2020 ELP grew 5% while the rest of the state grew 15.9%. In 2021 ELP actually lost 100 people. Yes, unemployment is down to 5.3% from 7% in 2021, but in the rest of the state it stands at 4%. The median household income is $48,886 in ELP while it is $63,826 in the rest of Texas. And, it is ranked #7 in Least Affordable Cities. I bring this up because while El Paso is basically poor, City Council treats it as if money is no problem. Higher property values come with higher property taxes. The highest in Texas. City Council has lavished City Manager Tommy Gonzalez with the HIGHEST salary in the State, $450,000 PLUS benefits. Gonzalez is given an annual amount of $42,000 for Health Exams and Travel. The El Paso taxpayer pays for his $5 Million Life Insurance Policy. And let us not forget the $1,000,000 that El Paso taxpayers will pay Gonzalez when he leaves. El Paso taxpayers will now be on the hook for a so far, $4 Million Loss on the newly built water parks. $1 Million in 2021 and $3 Million this year. To top it off, on Sept 14th, Gonzalez said he had not given up on Great Wolf Lodge! Really? In a time of unprecedented drought and where the Rio Grande stopped flowing in Albq. for the first time in 40 years? Will this be another boondogle costing the El Paso taxpayers? By no means do I mean this post to be doom and gloom. El Paso needs fresh blood and someone who will go against the current City Council sheeple and keep an eye on your taxes. Paved roads and an adequate infrastructure. Someone like Rich Wright who feels as I do, that what makes El Paso unique are places you can’t find anywhere else. Not a Ruth’s Chris or Top Golf or Whole Foods. I have put my money where my mouth is, and have donated to Rich’s campaign. This is long, and perhaps to many/some, long winded. But it needs to be explained that we are not the Silicon Valley and taxing the poor taxpayer is not acceptable.
” Is that El Paso does not have this kind of talent or cluster of technology and never will. ”
AGREED. I worked for Silicon Valley companies for over ten years and was there long enough to fully agree with you. It is a culture as much as tech cluster. People work 60+ hour weeks in cubicle farms in San Jose and are obsessed with the latest technology. Venture firms prowl the Valley looking for ideas and new technologies to fund. When there is a conference, it is packed with techies browsing the booths and collecting tchotchkes . My wife would always bring back a bag of t-shirts, pens and coffee mugs – Oracle; Sun Micro; HP; Siebel…
I was on the organizing committee here for our own local tech conference in 2007 and you had to beg people to show up. My experience here, starting with the SITO organization for some years and finally as a tech manager for the City, is that there is little interest in 60 hour weeks and, if you need deep expertise in something like Oracle Financials, there was not a person in town who knew crap about it. So the City had to pay consultants to configure and install it.
Maybe this will change and, if it does, it will likely be in the medical center and its affiliates. El Paso is “normal” when it comes to work-life balance and that is a good thing. But if you are serious about tech, throw out the balance part.
Jerry K: Thank You. The point I was trying to make to David (the original poster) is that the Silicon Valley Companies didn’t move there. They just organically sprouted due to the Stanford Research Park, plus the technology that the Military had in the Bay Area. Heck, it wasn’t even called Silicon Valley back when I went to school at San Jose State. I went there to get a Bachelor of Science in Advertising and at the time it was either UT or San Jose State. You could actually buy fruits and vegetables at farmer’s stands at the edge of town. It was a “town” filled with orchards, fruits and vegetables. And, Gilroy was the Garlic Capitol of the World. Now, all of that is gone, replaced with housing and manufacturing facilities. Now, it is so expensive due to the salaries and stock options by these tech companies, that the the nurses and police have to live in trailers during the week. They can’t afford the housing, one of the most expensive in the Country. BTW, you probably already know this, but UT ranks #9 in the USA in Computer science and I remember in the 1980’s driving by 1-35 near the UT campus and see huge buildings with Motorola and IBM logos. They were tapping into the local talent. El Paso’s strength might have to come to Healthcare, which I believe is the #1 job generator. It is in San Antonio which might come as a shock to many. UTEP’s core strength is mining and engineering, which is pretty limited.
“You could actually buy fruits and vegetables at farmer’s stands at the edge of town.”
Yep, I remember that fruit stand on the corner of First Street and whatever the street is that goes to the airport. On my trek back to Dallas on a Friday I would stop there and but a few items to eat on the plane that was Southwest, i.e., peanuts and a cheeky flight crew. It was in a field. Now that’s E-Bay. This was 1995-96.
Thanks for the trip down Memory Lane.
El Paso growth and ungrowth. Sept 11, 2001. 911 event. All our bridges shut down. Empty High schools along our border. Gobs of students in Mexico could not get to their classes. This is when bridge flow actually flowed. We are so intertwined w Juarez. In all aspects. The Mexican Narc wars. Want US paperwork quickly? Invest in a business here in El Paso. Juarez is part of us. We are part of Juarez. Go to a store and I am forced to talk in Spanish to the employee to get what I need. So what is the point?
Given these two choices, how much do you want to get paid? 75 cents an hour or 7 to 20 dollars an hour? Duh. How many Juarenses cross over and work here instead? Legally and kinda legally. It is called supply and demand. An endless supply of workers, who can cross over, take a good portion of their money and spend it in Juarez w their families vs here reduces the demand to pay good wages and knocks out the $ multiplier effect. Got a mechanic’s degree, get paid chump change at a dealership, so they can weed you out w low pay while many others line up tocompete for your low paying job. Engineering degree. Suffer several years until a gov or corporate job opening opens and then fight like crazy to have a chance. So much easier to leave El Paso and leave the less education jobs to the endless supply.
Simple, we have a skewed S& D business model and it works great for a few.
All thoughtful responses.
Regarding Rich Wright’s comment on the peso, although not your main point, you do highlight the fact that decisions made very far from El Paso impact El Paso much more than the decisions made by City Council.
Regarding the comment that Silicon Valley (and other rich regions) got their head start in very dissimilar ways from El Paso, that’s also true.
My view, which may be totally wrong, is that taxes are not the principal thing that holds us back. It’s a lot of things from our unique history to our relative isolation. But we’re still a unique town and we need to preserve what we have and bring back some things we’ve lost. The streetcar is something I appreciate. It would also be nice if El Paso and Juarez could become more open as well. Downtown would thrive (and the tax revenue would go up) if juarenses could cross to shop as they did in the old days. But to allow that is a decision, once again, made in Washington rather than locally.
David W: You are absolutely correct, El Paso/Juarez is very unique and very special in its own way. The problem has always been lack of high paying jobs, or jobs where you could spend your career and retire comfortably with a pension or retirement program. Cheap labor = Low Paying Jobs, is one of the results of living on the Border. Not just El Paso, but go all the way up and down from Tijuana, Nogales, ELP, Ojinaga, Del Rio, Eagle Pass, Laredo, McAllen and down to Brownsville. Its the same problem. In regards to “it would also be nice if El Paso and Juarez could become more open…..” The problem is, that Cd. Juarez is ranked 4th Most Dangerous City in the World. To put perspective on it, the #1 ranked city in the USA in terms of Murders is St. Louis, with 60.59 Murders per 100,000 people. Juarez is #4 in the World with 85.56 per 100K…or 4th in the WORLD. Tijuana is #1 at 138 murders per 100K people. People don’t want to go visit dangerous cities, where they feel they might be murdered, kidnapped, assaulted or raped. They want to go somewhere for a meal, drinks, concert or show where they feel safe and secure. At 66, I’ve seen it all from when Juarez was a glorious and wonderful time to when it became the World’s Most Dangerous City. The fact that Tijuana is the Most Dangerous City in the World indicates that there is a power struggle going on between drug cartels. And, even before I was born, Juarez was the “Las Vegas” of the Border. You could go great meals, wonderful drinks, gamble at elegant casinos, stay at luxurious hotels, find beautiful women (for pay), and all the drugs you could want. All, 24 hours a day. Ray Charles used to get his heroin in Juarez and Johnny Cash was busted in ELP after buying speed in J Town. Unfortunately, the power struggle for the drug routes in Juarez among competing business killed that business. No pun intended. And to blame Washington for El Paso/Juarez’ woes is misguided. You would have to blame the consumers of cocaine, fentanyl, heroin and to a smaller degree, marijuana. With the current wave of Venezuelans seeking asylum, you would have to go back to when Hugo Chavez was elected in 1998. Bill Clinton was then President. Or, even further back when Ronald Reagan and Oliver North were illegally supplying arms to the Contras in Nicaragua. They were in cahoots with the Mexican/Colombian cartels selling cheap cocaine in the USA through CIA 3rd Party sources (Barry Seals being one) and Southern Air Transport. A CIA owned “front” for transporting drugs to finance arms purchases. The “War on Drugs” gets complicated but I suggest you read “The Last Narc” by Hector Berrellez, former DEA agent or watch the 4 part series with the same name on Amazon TV.