MCALLEN, RGV – Harlingen and Mercedes may be only 15 miles apart but in terms of sales tax revenues over the past year they a world apart.
Over the last 12 months, November 2016 to October 2017, Harlingen’s sales tax revenues increased 6.42 percent over the same period in 2015-2016. That makes Harlingen No. 1 for percentage growth in the Rio Grande Valley.
Over the same period, Mercedes’ sales tax revenues dropped 11.50 percent, as compared to the previous 12 months. No city in the Valley suffered as big a drop.
A possible explanation for the difference in fortunes is Mercedes relies a lot on Mexican shoppers visiting the Premium Outlets.
Mexican shoppers have not been visiting the Valley as much this year. Some blame the violence in Reynosa, others say it has been the peso’s weakened value against the dollar, others still that President Trump’s comments about Mexico and Mexicans has had a effect, with Mexican tourists feeling they are no longer welcome in the United States.
Other cities that court Mexican shoppers, such as McAllen and Mission, have also seen their sales tax revenues dip, though not as much as Mercedes.
Harlingen relies much less on Mexican shoppers, with a lot of its retail activity based on buying power of local residents.
“Harlingen’s retail sales continue to climb as our unemployment rate continues to drop. There’s a correlation between earning more and having disposable income that leads to more spending. These statistics show that their is consumer confidence in the Harlingen area,” said Raudel Garza, executive director of Harlingen Economic Development Council.
“I expect our sales tax revenues to continue to perform well based on our outlook on the economic activity here in Harlingen. Several non-traditional retailers are helping boost the numbers as well.”
Garza noted that for the month of October, Harlingen’s sales tax revenues increased by a whopping 14.57 percent.
The top five cities in the Valley for sales tax revenue percentage increases over the past 12 months are:
No. 1) Harlingen – up 6.42 percent;
No. 2) South Padre Island, up 5.48 percent;
No. 3) San Benito – up 4.57 percent;
No. 4) Donna – up 2.6 percent;
No. 5) Weslaco – up 2.31 percent;
Matt Ruszczak, executive director of Rio South Texas Economic Council, analyses the sales tax revenue reports put out by the Comptroller’s Office. He said that when looking at the Valley as a whole, 2017 has been a good year.
“Over the year as a whole I am looking at this positively. If you combine the two counties (Hidalgo and Cameron) and all the cities within them, we were down for the year 0.51 percent,” Ruszczak said.
“Considering the shock we experienced with the peso fluctuations at the beginning of the year, all the political discussions that were going back and forth, the impact on consumer traffic on the south side of the border, I think that this is quite a positive report.”
Asked if there was a common denominator among the strong performers, Ruszczak said: “A tourism component as well as a focus on the local consumer.”
He noted the performance of Harlingen, South Padre Island, San Benito, Weslaco and Pharr, which saw a 1.25 percent increase in sales tax revenues over the past 12 months.
“They were the strong performers. That speaks really well for the local economy as a whole.”
Lyle Garza, executive director of Donna Economic Development Corporation, said he was pleased with the numbers for Donna.
“We track the sales tax figures carefully. The continued upward trend over the last 24 months is a testament to the city manager and city council’s commitment to bring additional traffic to the bridge and new retailers to the city,” Garza said.
The sales tax revenues for the Valley’s two biggest counties over the past 12 months were:
Cameron County – up 1.62 percent;
Hidalgo County – down 1.35 percent;
Here are the sales tax revenue percentages over the past 12 months for some of the other cities:
Brownsville – down 1.49 percent;
McAllen – down 2.48 percent;
Mission – down 2.88 percent;
Alamo – down 1.16 percent;
San Juan – up 1.80 percent;
The 12-month figures for other South Texas and border counties are:
Nueces County – up 1.56 percent;
Webb County – up 3.08 percent;
El Paso County – 1.96 percent;
Val Verde County – up 1.27 percent;
Maverick County – up 0.85 percent;