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MCALLEN, RGV – What a difference a year makes. This time last year, economic analysts were wondering if the Rio Grande Valley could climb to zero for year-on-year sales tax revenues. This year, the question is can the region hit double digits.

Matt Ruszczak, executive director of Rio South Texas Economic Council, crunches the numbers. He remembers back 12 months ago when the Valley’s economic situation was far from rosy.

“When we were in this position last year, we talked about how close we would get to break even, as a region, year over year. This year, we talking about how close can we get to double digits, year over year,” Ruszczak told the Rio Grande Guardian and Rio Grande Valley Public Radio 88 FM.

Matt Ruszczak

“It is exciting to be in this position. We are no longer talking about damage control, we are now talking about growth. I am excited about next month’s report.”

The Texas Comptroller’s Office collates sales tax collections on a monthly basis from cities and counties. The annual reporting period runs November-October. The most recent report looked at September 2018 and it was very good for the Valley.

“Looking at September 2018, compared to September 2017, overall the report is very positive. This is the 11th month of this reporting period. I am excited about reporting these numbers because the numbers look quite good,” Ruszczak said.

Cameron County’s sales tax revenues were up 5.87 percent in September 2018, compared to the same month last year. 

“That figures was driven by South Padre Island, which is up 6.83 percent, San Benito, which is up 3.79 percent, Port Isabel, which had a very strong month, up 9.23 percent, and Brownsville, up 9.67 percent,” Ruszczak said. “Harlingen was down slightly at 0.74 percent. Last year, Harlingen was the high flyer so now they plateauing in their numbers.”

Hidalgo County’s sales tax revenues were much more impressive.

“If we go over to Hidalgo County, the numbers look even better,” Ruszczak said. “So, as a whole, Hidalgo County is up 15.23 percent. That is very, very, strong growth. There are various drivers there. Weslaco, which is traditionally a steady growing community, had a very strong month, up 15.16 percent. We had Pharr up 15.21 percent, Mission up 14.04 percent, Edinburg up 9.71 percent, and Mercedes up 6.5 percent.”

Ruszczak pointed out that the main market that drives Hidalgo County is McAllen, which was up 18.13 percent for sales tax revenues in September 2018, as compared to the same month in 2017. “McAllen posted very, very, strong numbers,” Ruszczak said. 

If one combines both counties, Hidalgo and Cameron, the increase in sales tax revenues was 12.16 percent for September 2018, as compared to the same month last year,  “That is an exciting number to have in terms of growth,” Ruszczak remarked.

Year-to-Date


If one looks at the year to date figure, the September postings provided a real boost.

“Hidalgo County, year to date, is up 7.71 percent. That is a number we can definitely be excited about. Cameron County as a whole is up 5.62 percent,” Ruszczak said.

The RSTEC chief likes to compare the top two Valley counties to others along the Texas-Mexico border.

“At 7.71 percent, Hidalgo County is the fastest growing. Maverick County, which includes Eagle Pass, is up 6.09 percent. El Paso County is up 5.75 percent, Cameron County, as we said, is at 5.62 percent, and Webb County, which includes Laredo, is at 4.02 percent. So, we are doing very well compared to our friends on the border,” Ruszczak said.

The top five Valley cities year-to-date are Pharr, up 10.34 percent, McAllen, up 8.22 percent, Edinburg, up 7.64 percent, Weslaco, up 6.21 percent, and Port Isabel 6.20 percent.

“Eleven months in, it looks very, very, strong,” Ruszczak said, noting that the numbers are even more impressive, given the valuation of the peso.

“We have strong numbers despite a less favorable exchange rate situation. In 2017, the Peso hovered between 17.6 and 18.5. In September 2018, it was 18.8 to 19.2o. So, despite a weakening peso we have seen very, very strong reporting numbers across the region. It is a good sign that the local consumer continues to be very strong and is really driving these numbers,” Ruszczak said.

“It also shows our friends across the border are not getting scared off by small fluctuations of the currency at this point in time. They continue to be our guests and visitors. They continue to enjoy shopping opportunities in our region.” 

Asked why the Valley is doing so well, Ruszczak said: “It is hard with such a large economy, to point to one item that has made the difference. We are having this growth because we have a stronger local market. We have positive growth factors falling into place.”

Ruszczak said he wanted to “give a shoutout” to Steve Ahlenius, president of the McAllen Chamber of Commerce.

“Over the last couple of years, when the numbers were not so positive, Steve would always come out and say, ‘be patient, there is a lot of stuff going on in McAllen, a lot of new construction, we have some remodeling at the mall, it is impacting the numbers, don’t judge too quickly, wait until it all plays out.’ We have seen some of these numbers start to play out in McAllen. When we look at the McAllen numbers, they are starting to really accelerate, after being mixed in the past.”

Ruszczak said each community goes through transition phases with its economy. “Our economy was going through a transition in the last few years. Now, we have reached the next level and we are seeing the fruit of our efforts come through.”

Ruszczak concluded his remarks by pointing that, once again, the oil and gas industry is making a big difference.

“In September 2017, the price of West Texas Intermediate Oil was between $47.3 and $52.2 a gallon. This September, it was between $67.5 and $73.3 a gallon. “It is so much stronger this year. Higher prices means more jobs, which helps drive the economy.”

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