Overall sales tax revenues fall in Hidalgo County

January 21, 2010 7:02 PM Sean Gaffney  The Monitor

McALLEN — Mexican nationals delivered a golden November to retailers in McAllen and Mercedes, boosting sales tax revenues the first weeks of the Christmas shopping season as shops elsewhere in Hidalgo County continued to struggle. Overall, sales tax revenues fell countywide in November 2009 from the same month in 2008, draining tax coffers of many cities for the second straight year, according to data from the state comptroller’s office.

In McAllen, sales tax revenues jumped 6 percent from last year to more than $4.7 million. It was the best November for sales tax revenues in the city’s history, according to tax data.

“We front-loaded our advertising in Mexico this year and tried to have a bigger impact during the Christmas season,” said Steve Ahlenius, president and CEO of the McAllen Chamber of Commerce. “The (thing) that was critically important is that the peso in Mexico stabilized, so Mexican nationals had more buying power than they did a year ago.”

Cities and retailers in the Rio Grande Valley bank on Mexican nationals spending millions of dollars in this region every year, but in 2008, with the peso weak and the world economy crumbling, fewer came. In November 2009, however, traffic at the area’s international bridges jumped, and some retailers wondered at the time if it was a prelude to a better Christmas season.

For McAllen and Mercedes, where the sprawling Rio Grande Valley Premium Outlets helped boost sales tax revenues nearly 11 percent, it likely was such a prelude, albeit not necessarily for all retailers as both cities counted more shops than in the prior year. The only other area cities to see a rise in sales tax collections were Alton and Peñitas, where a new Wal-Mart opened last year.

“It’s been pretty good for us,” said Peñitas mayor Marcos Ochoa. “We’re still waiting for the December (numbers). … We expect it’s going to be even bigger.”

Tax revenues for all other cities fell in November 2009 compared to the same month in 2008. Topping the list of the declines were Edcouch and Granjeno, where revenues fell in each city by almost 40 percent. The more substantial fall was in Edinburg, where a nearly 13.5 percent decline represented a drop of more than $160,000 in November revenues from the year before, according to the data. Ramiro Garza, Edinburg’s city manager, said that despite the overall decline in tax revenues, retailers at the city’s much-touted Shoppes at Rio Grande Valley did well.

“They had a very good Christmas,” Garza said. “Obviously, it’s not the case throughout the entire city.”