WESLACO, Texas – The Rio Grande Valley could be looking at double digit growth in economic activity by the middle of the year.

This is the view of Matt Ruszczak, executive director of Rio South Texas Economic Council.

“Through Christmas and the first two months of this year, we are doing fantastic. I am going to take a quick peek into the crystal ball, which I usually try to avoid. In March and April, we should do quite well,” Ruszczak said, after analyzing the latest sales tax revenue collection numbers from the Texas Comptroller’s Office. 

“At the halfway mark, I would venture to say the region is going to be looking at potentially double digit year over year growth. We might get over that ten percent hurdle. Once again, the outlook is very positive.”

The Comptroller’s monthly reports focus on data from two months previous. Thus, the January 2021 report looked at activity in November 2020. The April 2021 report, the most recent to be published, looked at February 2021. Once the May and June reports are available, half a year of sales tax revenues will be known – November 2020 thru April 2021.

Matt Ruszczak (Photo credit: Periodico USA)

Barring any unforeseen downturn in economic activity, Ruszczak expects March and April 2021 numbers to look good, as compared to the same months last year. This is because, due to COVID-19, the economy started to contract in March 2020. A month later and the Valley was under a shelter-in-place order. “These were a couple of challenging months,” Ruszczak acknowledged.

This year, Ruszczak said, the sales tax revenue collections for March and April should include spending brought about by the federal government issuing $1,400 stimulus checks to most people.

Ruszczak provides his analysis of sales tax revenue collections to the Rio Grande Guardian each month via a Zoom interview. The most recent appearance focused on economic activity for February 2021 and November 2020 thru February 2021.

February 2021 included the big freeze, which was felt more acutely by Texas communities further north than the Valley. This is reflected in the numbers. Compared to the same month last year, sales tax revenues for the state of Texas as a whole were down 2.67 percent. In the Valley they were up 7.76 percent. “That is a ten percent differential,” Ruszczak pointed out.

In February 2021, Cameron County’s sales tax revenues were up 4.9 percent, Hidalgo County’s were up 8.93 percent, Starr County’s were up 6.6 percent, and Willacy County’s were up a whopping 29.84 percent. “All in all a fantastic month,” Ruszczak said.

Indeed, 37 of the Valley’s 44 communities reported percentage increases in sales tax revenues for February 2021, as compared to the same month last year. Of these 37, 32 were up over five percent and 12 were up over 20 percent. The 12 were: Bayview, Combes, Laguna Vista, Los Indios, Palm Valley, Rio Hondo, Santa Rosa, Raymondville, Alton, Edcouch, Elsa, La Joya.

“Larger communities are doing well, smaller communities are doing even better,” Ruszczak said. The explanation, he argues, is that during the coronavirus pandemic, shoppers have frequented stores closer to home. “I stand by my Covid shift theory,” Ruszczak said. “But, overall, the Valley posted a really, really good number.”

Looking at the year to date numbers, that is the four months from November 2020 to February 2021, only three Valley communities saw loses in sales tax revenues. They were Roma, down 2.24 percent on February 2020, Sullivan City, down 13.37 percent, and Mercedes, down 14.35 percent.

The Valley as a while did 9.57 percent better in the first four months of the year than it did in the same period in 2019-2020. In comparison, the state of Texas as a whole was only up by 1.12 percent. Cameron County was up 9.02 percent, Hidalgo County up 9.69 percent, Starr County up 9.74 percent, and Willacy County up 23.86 percent. 

Reacting to those percentages, Ruszczak said: “We are doing fantastic.”

The Valley communities to post a 20 percent increase in sales tax revenues over the first four months of the year were: Bayview, Combes, La Feria, Laguna Vista, Los Fresnos, Rancho Viejo, Santa Rosa, Raymondville, Alton, Donna, Elsa, Granjeno, La Joya and Mission.

Just under the 20 percent growth, Ruszczak said, were Progreso Lakes, Penitas, Palmhurst, Edcouch, and Alamo. 

Ruszczak said companies looking to invest in a region can be influenced by such numbers.

“They could be looking at well-performing regions. And our region is extremely well-performing. I am excited about the outlook we might be having in this region in terms of investment, particularly on the service, the retail and hospitality side. Those industries are coming roaring back,” Ruszczak said.

The long term outlook looks bright, the economic development specialist added.

“All the indicators are extremely positive. It is startling to look like are going to see a very positive future here. This is one of the regions that is primed for that (investment). I would argue it has the numbers to justify investment, both in terms of our international connections as well as our domestic infrastructure here.”

Editor’s Note: The main image accompanying the above news story shows Junior’s Supermarket in Hidalgo, Texas. (Photo credit: The Shelby Report)

Watch the Zoom interview with Matt Ruszczak here:

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