MCALLEN, RGV – Cameron and Hidalgo counties experienced an increase in sales tax revenues of at least five percent for the first half of 2018.
Matt Ruszczak, executive director of Rio South Texas Economic Council (RSTEC), analyzes the sales tax revenue reports distributed by the Texas Comptroller’s Office every month. He says the results from November 2017 through April 2018 show an increase in sales tax revenue for the combined region, Hidalgo and Cameron counties, of 5.77 percent, as compared to a year ago.
Cameron County went up 6.36 percent over the same period last year, and Hidalgo County went up 5.48 percent.
“Overall, if you look at the numbers throughout the region we’ve had a very positive first six months from a sales tax collection perspective. We’re also going right along the trend that we see along the border,” Ruszczak said.
“A decade or so ago we had double digit numbers, but obviously our economy is much larger now. So, the single digit growth numbers at this point in time show a similar growth to that we saw with the double digits and maybe even larger than that.”
Ruszczak told the Rio Grande Guardian the RGV’s results are similar to the other Texas-Mexico border communities. Some of the sales tax revenues for other cities and counties throughout the border region from November 2017 to April 2018 include:
Webb County — up 5.66 percent
El Paso County — up 5.59 percent
Maverick County — up 6.36 percent
Val Verde County — up 2.23 percent
As mentioned in a previous article by the Rio Grande Guardian, Ruszczak says one of the factors impacting performance of the retail climate is the peso exchange rate. In April 2017, the peso fluctuated between 18.5 and 19.2. In April 2018, the peso was a little stronger ranging between 18.0 and 19.0.
Ruszczak says RSTEC will keep track of the peso for the next six months. The organization will take note of how long the improved peso exchange rate persists and how strong of an impact the peso will be on consumer behavior. Another factor that will affect the exchange rate is the upcoming Mexico and U.S. elections.
“That’s always a time of uncertainty. That always exerts pressure on the peso which means the peso drips in value a little bit until we have an idea of who’s going to be neighboring us in the south,” Ruszczak said.
“Here, we have the U.S. midterm elections coming up and as a part of that process, there are currently all of these discussions about NAFTA and trade. There is also a lot of uncertainty there. Uncertainty always drives prices up or in this case drives the prices for the dollar up and weakens the peso.”
One other factor affecting the retail climate is the price of oil. The price of West Texas Intermediate per barrel, in April 2017, ranged between $49 and $53.4. In April 2018, the prices fluctuated between $63 and $68.6. Ruszczak says while the price with West Texas Intermediate is not the only factor that impacts the Texas economy, it functions as an indicator of how much economic activity is happening.
Ruszczak told the Rio Grande Guardian that an effort has to be made at the international level to reduce the price of oil per barrel, in order to maintain strong economic growth by making energy cost efficient to communities.
“We’ll see how those international efforts will translate to the price of West Texas Intermediate and we’ll see what impact that will have on the general Texas economy or the level of economic activity and how that will trickle down to our local community,” Ruszczak said.
Some of the sales tax revenue numbers for November 2017 through April 2018 in Hidalgo County include:
Edinburg — up 6.96 percent
McAllen — up 5.27 percent
Mission — up 2.27 percent
Pharr — up 8.74 percent
Weslaco — up 3.22 percent
Mercedes — down 2.76 percent
Alamo — up 5.13 percent
Donna — up 5.42 percent
San Juan — up 2.78 percent
Some of the sales tax revenue numbers for November 2017 through April 2018 in Cameron County include:
Brownsville — up 5.33 percent
Harlingen — up 9.14 percent
Port Isabel — up 1.44 percent
San Benito — up 1.31 percent
South Padre Island — up 3.14 percent
Los Fresnos — up 7.97 percent
Rancho Viejo — up 7.18 percent