MCALLEN, Texas – The influence of Mexican shoppers on the Rio Grande Valley economy is not as great as it used to be, says a top economic development analyst.
Matt Ruszczak is executive director of Rio South Texas Economic Council. Every month he analyzes the latest sales tax revenue reports put out by the Texas Comptroller’s Office.
Looking at the sales tax revenues for Valley communities over the few months, Ruszczak says he has come to the view that the Mexican shopper does not have as big an impact on the local economy as generally thought.
This is because the sales tax revenues have been quite healthy, all things considered. However, the international bridges have been closed to Mexican shoppers since March.
“What impact do they (Mexican shoppers) have on our market? The bridges were closed to non-essential traffic in late March and so this is the report that really covers the time period where the bridges have been closed to non-essential traffic,” Ruszczak said, in a Zoom conversation with The Rio Grande Guardian.
“And nonetheless, we have had a fantastic performance, all things considered. A really, really, a strong performance.”
Studies in the past, most notably from the Federal Reserve Bank of Dallas, have shown the Mexican shopper to be very important to the Valley economy. In cases of a city such as McAllen, it is thought their contribution to retail activity could be as much as 35 percent.
“I would make the argument at this point in time that… for a long time Mexican shoppers made up a significant portion of our retail sales. Numbers that were floated out there, regionally… maybe up to one third of our region’s retail sales originating from Mexico,” Ruszczak said.
“There were some very good studies that were done 20 years ago and ten years ago and around that timeframe that validated those numbers. I used to believe these figures. Looking at the data over the last couple of years from our local sales taxes, and specifically looking at the data now, in these circumstances I would actually make the argument now that that assumption, that one third or so assumption, is no longer correct.”
Ruszczak said he does not know what percent of retail activity can be attributed to the Mexican shopper. “That needs to be properly studied. But I feel very strongly that that number is below a third, potentially significantly below a third.”
Asked if a university or team of economists should produce a new study on the impact of the Mexican shopper on the Valley economy, Ruszczak said:
“This is obviously an important subject to study because it has lots of economic dynamics in it. Taking a look at the overall impact of the Mexican shopper, maybe not just on the Valley but maybe on Texas as a whole… I think it may be worthwhile to revisit that and see what the impact is.”
Here is our Zoom conversation with Matt Ruszczak on June 2020 sales tax revenues for Rio Grande Valley communities:
Editor’s Note: The above story is the second in a two-part series on June 2020 sales taxes revenues for Rio Grande Valley communities. The first part focused on how bedroom communities are doing better than magnet communities during the coronavirus pandemic. Click here to read Part One.
Editor’s Note: The main image accompanying the above news story shows La Plaza Mall in McAllen, Texas. (Photo credit: Simon Properties).
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