Park gateway towns brace for 20%-50% pandemic tax drop

Two of Wyoming’s Yellowstone National Park gateway communities are budgeting for a drop in sales tax revenues of between 20% and 50% for the fiscal year beginning in July, underscoring the uncertainty facing pandemic-plagued tourism revenues.

Cody City Administrator Barry Cook is projecting the 20% decline in sales and use tax while a Jackson town councilor and the Teton County treasurer reckon the dip will go as far as 50%. The officials made these forecasts following the first open days at Grand Teton and Yellowstone national parks, which respectively saw traffic between 45% and 105% of last year’s numbers. 

Yellowstone traffic is expected to increase significantly in the next few weeks, Superintendent Cam Sholly wrote in a statement. Montana is expected to lift its 14-day quarantine order June 1, allowing the park to consider opening its three Montana gates — through which 70% of visitors drive.

Travelers’ sentiments for the next six months, however, remain lukewarm, according to assessments by the U.S. Travel Association, an industry group based in Washington, D.C. “Most respondents do not feel safe today in any public venue,” the organization wrote in a summary of a May 14 survey.

Most prospective travelers, however — 68% of them — “still feel safe today in the personal vehicles,” the association wrote.

At the Cody Country Chamber of Commerce Visitor Center outside Yellowstone’s East Gate, the number of visitors more than doubled in the last week, said Tina Hoebelheinrich, the area chamber executive director. But, “we’re hearing hotels are still down, our restaurant business seems to be slow with in-house dining.”

She wouldn’t predict summer traffic, a reluctance shared in a survey comment received by Jackson Town Council member Jonathan Schechter.

“No one who answers these questions has any idea,” one person wrote Schechter in response to his questions about the coming summer’s business. “Any answer is a total guess.”

A mix of behaviors

The parks’ openings come as Wyoming struggles with COVID-19 outbreaks or cases at institutions where people gather or live, according to media and state health reports. Those include recent incidents at long-term care institutions in Casper and Worland; the closure of a child-care center in Casper; a scare at a preschool in Evanston; and cases at the state hospital in Evanston and a Lander retirement home.

Residents of Park County east of Yellowstone appear ready for a break from travel restrictions, Hoebelheinrich said. “We’re excited that they’re stopping at the Visitor Center to ask for the inside scoop,” she said of the season’s first tourists. “We think that we’re ready for them.”

There’s a mix of behaviors, she said. At the visitor center, employees wear masks and tourists are generally respectful of social-distancing guidelines.

About half of those coming in wear face coverings, Hoebelheinrich said. But on the sidewalks, “I am not seeing masks.

“I think people feel more safe outside,” she said. “I think outdoors has become the perceived safer zone.”

There’s a mixture of emotions on the Cody streets, said Greg Pendley, the group sales coordinator at the Cody Cattle Company Dinner and Show. Those range from “thank goodness [the park’s] open” to “I hope people don’t bring illness,” he said.

Prospective visitors he has talked to want to know how things are going, he said. They ask “can you go into town, can you get food?” he said. There’s “a lot of fear left over,” Pendley said.

Visitors to Yellowstone should steel themselves, said Superintendent Sholly, who earlier stated that the Park Service would not police behavior.

“If you are not comfortable being in places where other visitors are not wearing masks, I suggest one of two things,” he wrote in a statement. “Plan your visit for another time and don’t come to the park now; or … don’t put yourselves in situations where you’re around visitors who are not following health recommendations.” 

About 40% of prospective travelers feel safe leaving their communities, the U.S. Travel Association wrote, citing a May 14 survey. Another 33% do not. Some 34% feel safe in parks, which is about the same proportion — 31% — that feel safe in grocery stores and supermarkets.

In host communities, 35% support visitation, 35% oppose it and 30% are undecided, the association reported.

Community voices

Comments in the Jackson council member’s survey reveal wariness regarding health risks. “Returning to a work environment dealing with tourists & high risk of Covid exposure is terrifying,” one person wrote. “I think people will be ready far sooner than is safe for them to travel,” said another.

Because travel-hungry ex-isolators will shun airplanes, “Jackson could be flooded with visitors,” one comment reads. Said another respondent, “Unfortunately the majority of those who will be traveling, arriving here, will be those who believe Covid-19 is not big deal or is even ‘fake news.’”

Respondents also addressed Schechter’s principal questions regarding the economy and their personal outlooks. “Things are going to be financially ugly,” one wrote. 

Hopes for a fall resurgence of tourism may be falsely pinned, some suggested.

“Fall has the tendency to bring a lot of retired people,” wrote one person, “[s]o it will be interesting to see if that happens.” Observed another: “Tour groups are a significant portion of lodging business during the fall and I think the majority of those trips will end up being cancelled.”

That type of speculation led Schechter, an economic consultant in private life, months earlier to seek a consensus look into the crystal ball. “As I was thinking about decisions I had to make as a town council member … I wasn’t at all comfortable with the forecasts,” he said.

The “big caveat,” he wrote of his results, was that his email-blast survey was not designed to capture a statistically valid sample of residents but instead was a Wisdom of the Crowds exercise. In addition to their best guesses of the future economy, Schechter asked respondents — most of whom live in Teton County — about their personal-finance forecasts.

Those answers, which he holds as accurate, revealed a growing pessimism over the last two months. Respondents estimates for sales tax returns are more speculative, he said, amounting to guesses. He completed the survey before the parks announced their opening dates.

Nevertheless, Schechter plugged that 460-person “wisdom” into a model he constructed that accounted for the 310 categories of businesses in the North American Industry Classification System.

Sales and use taxes are reported according to that system, he said. He also calculated, through various means, the portion of sales and use taxes paid by tourists compared to residents and how much local spending might decline with a drop in tourism.

The model accounted for things like how or whether fewer tourists would affect construction, or insurance services, or educational services.

“Tourists are not coming in and buying building materials,” he said. On the other hand, tourism accounts for 90% of lodging use. Respondents predicted declines in summer, autumn and winter sales tax of 51%, 44% and 35% respectively.

Revenues from the state-mandated 4% sales tax will decline 51% from April 2020 to the end of the year, when compared with the same period the year before, his survey and model predict. That would reduce county revenues from $51.9 million in the 2019 months to $25.6 million in the 2020 months.

Cody forecasts 20% sales tax drop

Cody doesn’t quite see it that way. City Administrator Barry Cook hitched his budget to a 20% drop in sales and use tax revenue.

When he learned of Schechter’s model and estimates, “I said ‘Wow!’” he told WyoFile. “It did scare me.”

Cook did his own trans-Wyoming survey a few weeks ago, he said. “There was a low of 15% to high of 50%,” he said of predicted declines. Most estimates were in the negative 20%-30% range with a lot of government administrators settling on minus 25%.

“I just hope I’m correct,” Cook said. “We’re going to take a look at our budget mid-year,” and adjust as necessary. The fiscal year begins July 1. 

Katie Smits, Teton County’s treasurer, adopted the Schechter estimate. Smits said she pored over three years of sales tax returns and talked with Jackson Hole Chamber of Commerce experts, business owners, commissioners, town officials and Schechter.

In 2019 the county budgeted for an expected $19.1 million in sales and use tax revenue. “We’re slashing that in half to $9.6 million,” she said.

“Ouch.”

Sales and use tax revenue make up 45% of the county’s general fund budget, Smits said. Consequently, there is some cushioning from other revenue sources. Towns operate on a different revenue formula.

American travelers may take advantage of an unusual season in Yellowstone and Grand Teton, many believe. Without the typical crush of traffic, 2020 will be a great time to see Yellowstone, Pendley said.

Hoebelheinrich believes Yellowstone will be “incredibly popular,” this year. “We are hopeful folks will take this opportunity to go on the great American adventure,” she said.

Grand Teton visitors shared their excitement about increased access Monday, said park Public Affairs Officer Denise Germann. “I saw lots of smiles and eagerness to drive the Teton Park Road, bike the pathways, and fish near Jackson Lake Dam,” she wrote in an email.

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Parks remain a rejuvenating experience and can re-center visitors during uncertain times, as witnessed by social postings about the emergence from her den of what’s probably the world’s most famous grizzly bear. Known as 399, the 24-year-old mother strolled into view with an unusually large litter of four cubs of the year.

She looked skinny. One cub is quite small. The mother’s persistence, success and future appeared emblematic to her virtual worldwide audience of the worries and dreams of a troubled planet.