Joseph Krist

Publisher

TOURISM – NY LAS VEGAS

Evidence is starting to amass which shows the impact of efforts to restrict immigration is lowering economic activity. The impact is clear in places where tourism is a significant contributor their local economies. Las Vegas has been seeing a decline in visitors and casino handle. According to data from Smith Travel Research, hotel occupancy in Las Vegas fell 14.9% in June. The data worsened in July, with the city posting the sharpest decline in the nation for the week ending July 5, when occupancy fell to 66.7% — down from last year.

A major factor in the decline is fewer international visitors, which dropped more than 13% in June alone. International visitors will soon need to pay a “visa integrity fee” of $250. The fee will apply to all visitors who are required to obtain nonimmigrant visas to enter the U.S. This comes as Las Vegas was already battling with the economic impacts of lower visitor levels. According to the Nevada Department of Employment, Training, and Rehabilitation, the Las Vegas metro area ended 2024 with an unemployment rate of 5.9%, the highest of any large metro area in the country.

New York City expects 2 million fewer international visitors in 2025, a 17% decline with $4 billion in lost tourism spending. It is a problem because foreign visitors make up only 20% of arrivals but account for 50% of all tourism spending. The steepest declines are from Western Europe (Germany down 28%, UK down 14%) and Canada (car trips down 38%, air travel down 24%). The numbers were expected to be positive at the beginning of 2025. The impact has been so pronounced that estimates were significantly reduced in May.

VINEYARD WIND

Vineyard Wind, the offshore wind farm off Massachusetts, is now sending power to the grid from 17 of its planned 62 turbines, and another six are fully installed. This despite the pressures from the effort by the Trump administration to not only stop supporting wind turbine generation but to try to impede the operation of the existing wind generation fleet. A broken turbine blade and its impact on Nantucket is expected to lead to litigation against the project.

In the interim, Nantucket’s select board gave Vineyard Wind two weeks to respond to a list of demands, including that it meet deadline requirements for notifying local officials of emergencies. Violations could result in fines up to $250,000, the town said, although it was unclear how such a policy would be enforced. Fiberglas fragments of a massive wind turbine blade that broke apart off Nantucket began washing ashore last summer during the peak of tourist season after pieces of the blade at the Vineyard Wind project began falling into the Atlantic Ocean in July.

NATURAL GAS

The federal court for the Northern District of New York upheld New York state’s “gas ban” legislation. New York’s legislation is the first statewide law that restricts natural gas use in new buildings, effectively banning gas stoves and other fossil fuel appliances in most new construction starting in 2026. The plaintiffs argued that New York’s legislation is preempted by the federal Energy Policy and Conservation Act (EPCA), which prevents state and local governments from setting their own standards concerning energy efficiency or energy use of appliances.

The court also ruled that New York’s prohibition on the installation of fossil-fuel equipment does not concern the “energy use” of covered products as defined by EPCA and is therefore not preempted. 

NUCLEAR

The Nuclear Regulatory Commission issued a series of approvals that allows the owner of the closed Palisades Nuclear Plant in Michigan to continue its process of restarting operations. The approvals allow Holtec to begin the fuel loading process starting in August. The Nuclear Regulatory Commission said that this is the first time a nuclear plant has been granted an operating license after being licensed for decommissioning.

ELECTRIC VEHICLE SALES

A record 607,089 EVs were delivered in the first six months of the year, but sales in the second quarter were still lower than in Q2 2024. A big part of that Q2 decline has to do with Tesla. Tesla doesn’t report its sales, but it delivered an estimated 60,000 fewer vehicles in Q2 compared to a year ago. General Motors sold 46,280 EVs in Q2, more than double its sales in the same period last year. Rivian reported lower deliveries in the second quarter. It reiterated that it still expects to build a new headquarters and an EV factory in Georgia. Smaller EV company Lucid says it delivered 3,309 cars in Q2. 

BIG BEAUTIFUL IMPACTS

Cuts to SNAP are coming. The One Big Beautiful Bill reduces federal spending on the program by 15% by 2034. One in five New Mexicans uses SNAP—the highest rate in America. The state reckons that it is set to lose somewhere between $224m and $352m in federal funding in the first year alone. Almost 60,000 New Mexicans are likely to become ineligible for support. SNAP is available to those at or below 130% of the federal poverty line, around $3,400 per month for a family of four. 

Previously, the federal government paid for all SNAP benefits, ensuring that even poor people in poor states received support.  From 2028, the amount states will pay will be based on the amount of SNAP payments they disburse incorrectly, known as the error rate, on a sliding scale. Those with a low-enough rate can avoid paying entirely, while those that send more than 10% of payments incorrectly will have to pay for 15% of benefits. The national average is 11%

INCOME EXPERIMENT OUTCOMES

The movement to provide guaranteed incomes as a way to improve the lives of lower income Americans has long championed the perceived value of these plans. In some places like Stockton, CA, a guaranteed income program was conducted on a small scale with some positive results. Monthly payments were provided and contrary to the predictions of many, recipients used the money responsibly and the program was seen as a limited success.

Now, a new study of certain guaranteed income programs has challenged those results. Baby’s First Years is the first study in the United States to assess the impact of poverty reduction on family life and infant and toddlers’ cognitive, emotional, and brain development. One thousand eligible mothers were recruited in hospitals at the time of their child’s birth across four sites — New York City, greater New Orleans, the Twin Cities, and the Omaha metropolitan area. Mothers receive a monthly unconditional cash gift of either $333/month or $20/month for the first 52 months of their child’s life. Recruitment of study participants began in May 2018 and ended in June 2019. 

What the study found was that after four years of payments, children whose parents received $333 a month from the experiment fared no better than similar children without that help, the study found. They were no more likely to develop language skills, avoid behavioral problems or developmental delays, demonstrate executive function or exhibit brain activity associated with cognitive development.

Children in the families getting the higher cash payments did no better on tests of vocabulary, executive function, pre-literacy skills or spatial perception. Their mothers did not rank them more highly on assessments of social and emotional behavior. And they were no more likely than the children in the low-cash group to avoid chronic health conditions like asthma.

FIRE INSURANCE

Wildfires continue to pressure utilities as they attempt to manage the risk of wildfire associated with poorly maintained equipment and management of the environment susceptible to damage from their equipment. The companies have been seeking a variety of ways to reduce or eliminate their potential for claims for damages from wildfires. The latest iteration of such a financial management strategy is being reviewed in Nevada.

In January, NV Energy asked the Public Utilities Commission (PUC) to allow it to establish a $500 million wildfire self-insurance policy to protect its customers from risk associated with a catastrophic fire caused or exacerbated by the utility’s equipment. the self-insurance policy would see NV Energy collecting funds from customers to cover potential losses, instead of purchasing traditional insurance from a third party insurer. The policy would cover any damages utility customers sustained in a fire if the blaze was found to be started by NV Energy’s equipment — it would not cover damages to the utility’s equipment or facilities.

The average Northern Nevada residential customer would see their bill increase by about $2.40 per month, while an average Southern Nevada residential customer would see an increase of about $0.50 per month (accounting for the higher risk of wildfire in Northern Nevada). By having customers pay into the fund over the next decade, the utility’s total wildfire insurance would exceed $1 billion.

The move comes as the availability and cost of insurance continues to steeply increase. In 2018, NV Energy paid approximately $1.35 million for insurance and received approximately $485 million in coverage, meaning each dollar paid resulted in about $360 dollars in coverage. For coverage this year, the company paid $54.34 million, receiving about $405 million in coverage — despite paying roughly 50 times more, each dollar results in less than $7.50 worth of coverage.

BIG TROUBLE FOR A SMALL UTILITY

The Holly Springs Utility Department serves some 12,000 retail electric customers in and around this small northern Mississippi town. It has provided power purchased from the Tennessee Valley Authority since 1935. In recent years, the utility has gained a reputation as an unreliable provider with opaque finances.

A winter storm in 2023 left some customers without power for two weeks. That and the lack of significant visible efforts to address reliability and/or resilience challenges drove political support to empower the State Public Service Commission to examine the utilities financial and operating issues. Now the findings of the review are out.

“Allowing them any more time would be fruitless as well as disrespectful to the utility’s long-suffering customers. “We believe our report makes clear that the City and (utility department) lack sufficient technical, operational, and management expertise to effectively reverse the downward trajectory this electric system has been on for some time,” 

That’s harsh but true. The legislation backing the appointment of the consultant also allows the PSC, if it finds the utility can’t provide “reasonably adequate electric service,” to request a court-ordered receivership for the utility. The state’s consultant found that Holly Springs service falls below that standard. So, the state appoints a receiver and problem solved? Not so fast. The consultant recommends exploring one of the following options: selling the utility to another city or cooperative utility; converting it to a cooperative to open up access to low-interest loans; or eminent domain or condemnation. There was doubt expressed as to whether another entity could be found to manage a receivership.

The Tennessee Valley Authority is suing the city of Holly Springs for breaching a contract by continuing to mismanage its electric department. TVA, which has sold power to north Mississippi city since 1935, alleges Holly Springs breached a power contract between the two parties by taking funds from its utility department when it shouldn’t have, as well as by failing to make timely payments, increase its retail rates to customers, and provide regular financial updates to TVA.

ICE AND THE CALIFORNIA ECONOMY

The actions of federal immigration officers to carry out deportation policies in greater Los Angeles and agricultural areas of the state. There has been much speculation as to the potential economic impact of the reduced pool of labor resulting from ICE efforts at enforcement. The first of what will likely be many studies is out quantifying the impact.

A June report from the Bay Area Council Economic Institute found that, based on their wage contributions to the economy alone, undocumented workers generate nearly 5% of California’s gross domestic product. With 2.28 million undocumented immigrants living in California, they represent 8% of workers in the state. Researchers calculated the state’s agricultural industry would contract by 14% and the construction industry would shrink by nearly 16%. 

Early reports from farmers are also not optimistic, with groups reporting severe labor shortages during peak harvesting season for many crops. Local hotels and other businesses that rely on tourism are heavily reliant on the immigrant workforce. Visit California, the state’s marketing agency, in May projected international visits would decline by 9.2% in 2025, due to negative sentiment toward the Trump administration’s trade policies.

MASS TRANSIT

The Los Angeles County Metropolitan Transportation Authority settled a lawsuit over alleged violations of state and federal law and Metro policy related to a multimillion-dollar contract to update subway cars ahead of the 2028 Olympics. The authority agreed to pay $250,000 to settle a lawsuit that alleged it violated state and federal law and its own manufacturing policy related to a multimillion-dollar contract with South Korean Hyundai Rotem to build at least 182 rail cars to replace much of its aging fleet.

Metro said “the delivery timeline has not been impacted” by the lawsuit. The transit agency still expects to receive 42 cars ahead of the Games, as was laid out in the original proposal. An additional 140 cars are expected to be delivered by May 2030.

In New York, the MTA is proposing raising the base transit fare by 10-cents to $3, with no customer paying more than $36 for subway and local bus rides in a seven-day period, according to the MTA. Monthly and weekly commuter rail passes would increase by 4.4% and tolls on bridges and tunnels would go up by 7.5%.

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