Big Increases in Sales Tax Revenue


Big Increases in Sales Tax Revenue

New wind farm construction in the Raymondville area is part of what has driven sales tax revenue percentage increases that rank among the highest in the Valley. (VBR)
New wind farm construction in the Raymondville area is part of what has driven sales tax revenue percentage increases that rank among the highest in the Valley. (VBR)

Ever since Raymondville posted a whopping 66-percent increase in sales tax revenue for October 2017 over the same month in 2016, the small Willacy County city has continued to see gains with percentage growth among the highest in the Rio Grande Valley.

With a population of fewer than 12,000 people, the Raymondville economy took a blow when Walmart closed in January 2016, laying off 149 workers. At the time the super store represented about 10 percent of the city’s tax base. Just between January and February of 2016, the city’s reported sales tax revenue dropped from $139,458 to $103,695.

Since the big October increase, which would have been for sales in September since state reporting runs a couple of months behind actual sales, the numbers have been lower but still among the highest percentage increases in the region.

The numbers are not driven by new businesses opening up shop, City Manager Eleazar Garcia said. “We haven’t had an influx of new business. It’s the existing businesses that we have right now benefiting from some of the things that have come around and made an impact.”

New wind farms are under construction and a major pipeline project has drawn workers from other areas. “We have a lot of construction workers coming to stay in our hotels and eating in our restaurants,” Garcia said. “It’s hard to get into a local restaurant these days at lunch time.” Some newer hotels constructed in Raymondville like Holiday Inn Express and La Quinta have created more rooms to accommodate these temporary workers.

While wind farms and pipelines are good economic developments in South Texas, Raymondville also benefited from another, more unfortunate, arrival of guests. Last fall after Hurricane Harvey devastated the upper Texas Gulf Coast, thousands of people were displaced from their homes. Some of them temporarily relocated to South Texas and stayed in local hotels. “That’s not the kind of news you want to see but it did have an impact on the local economy,” Garcia said.

But Garcia is still not sure how to account for the 66-percent jump in October sales tax revenue, which would have been numbers reflecting activity in August. “Something big happened but we can’t figure out what it was,” Garcia said. “And the state won’t tell us anything.” He added it could have been something like businesses submitting delinquent sales tax dollars during that time to get current. But the facts remain a mystery.

Raymondville’s most recent sales tax numbers indicate the upward trend is slowing. “I noticed the difference this past month, that it’s tailing off a little bit,” Garcia said. In January, $101,498 in sales tax revenue was reported, a 14.19-percent increase over the same month in 2017.

Garcia said the city continues to seek new investment in the community, although he was not at liberty to discuss any negotiations that may be underway. He did say that the national debate over immigration reform has delayed some public works projects that would attract construction workers and create some permanent jobs.

“Once immigration is done, and I feel sure it will get done, then you will start seeing some movement down here,” he said.

George Cox is a veteran journalist with more than 30 years experience as a newspaper writer and editor. A Corpus Christi native, he started his career as a reporter for The Brownsville Herald after graduating from Sam Houston State University with a degree in journalism. He later worked on newspapers in Laredo and Corpus Christi as well as northern California. George returned to the Valley in 1996 as editor of The Brownsville Herald and in 2001 moved to Harlingen as editor of the Valley Morning Star. He also held the position of editor and general manager for the Coastal Current, a weekly entertainment magazine with Valleywide distribution. George retired from full-time journalism in 2015 to work as a freelance writer and legal document editor. He continues to live in Harlingen where he and his wife Katherine co-founded Rio Grande Valley Therapy Pets, a nonprofit organization dedicated to raising public awareness of the benefits of therapy pets and assisting people and their pets to become registered therapy pet teams.