MCALLEN'S SALES-TAX WOES A WARNING TO BROWNSVILLE

By Juan Montoya
Declining sales-tax receipts approaching fiver percent less this year than last has McAllen leaders scrambling and restricting new positions in city government there.
This city – which has historically positioned itself as the shopping Mecca for northern Mexico including reaching south to Monterrey, Nuevo Leon, and  as far west as Laredo – has seen its sales tax receipts decline by $1,627,485 from the same period for 2015. (See numerical graphic at bottom.)
This has forced the city to lay aside plans to hire workers in several positions.
McAllen's sales-tax revenues lead all other cities in Hidalgo County. In Brownsville, its 2015 sales tax revenue ($27,410,120) was actually higher then the ad valorem property taxes in the 2016 city budget ($26,671,428).
McAllen city officials said that the devaluating peso and the violence in northern Mexico has contributed to the decline in sales there.  
And, unlike Brownsville, where city commissioners force a "transfer" from the Public Utility Board to offset shortages during budget time and sometimes in between, McAllen does not have that luxury and must curtail municipal expenditures.
"What we have in effect in Brownsville is the commission counting on the annual transfer of some $7 million in PUB funds received from the ratepayers who already pay property taxes," said a former PUB board member. "It is, in effect, a kind of double taxation on the people."
McAllen also has Development company firmed under the state's 4a, 4b programs to fuel economic growth and fund quality of life projects. Brownsville chose to split the half-cent into two quarters and fund the Greater Brownsville Incentive Corporation and the Brownsville Community Improvement Corporation.
And while McAllen focuses  all its incentives into one corporation, Brownsville has seen its commissioners funnel the funds these corporations to fund the projects fund the pet projects of the commissioners happen to be in office at the time.
That's one reason the BCIC has, under Rose Gowen, steered the bulk of its estimated $4.2 million share of the sales taxes toward bike and hike trail and other "healthy" initiatives such as bike barn, the farmers' market and Cyclobia.
Before that, under the force of commissioner Charlie Atkinson, millions of these dollars and bonds issued with the tax receipts as collateral were funneled toward the Brownsville Sports Park.
Over that the GBIC, Ambiotec (and United Brownsville architect) Carlos Marin has collected thousands monthly toward his VIDA initiative, claiming it is lifting adults out of poverty and to good paying jobs. Every attempt by local bloggers to verify the vaunted results has resulted in stonewalling by tis directors.
And the GBIC has been seen as the personal ATM of local "planners" and visionaries who have used its funds for formulating plan after plan for projects they promised would generate "sustainable" economic growth. So far, the only jobs generated by these "plans" have been the jobs of the planners and engineering companies who are often the sole company vying for the bucks before the GBIC board.
And so plan after plan gets shelved and is collecting dust in someone's office. Even the pliant board members of the GBIC shied away from throwing good money after bad on projects pushed by Marin, Oscar Garcia, Jr., and other "dreamers" on the public nickel.
Some of these fine folks would have the city, university, college district and school district place all their eggs on gleaning a few economic development crumbs pegged to the maquiladora industry in Matamoros (or as they say Bi-National Economic Development). This – given the flight characteristics of this industry – is another blind alley to nowhere.
Both Hillary Clinton and Donald Trump are making noises about eliminating the tax-free import of goods produced in these plants with cheap labor into the U.S. market. If and when this comes true, expect them to seek greener pastures and leave the local economy on both sides of the border high and dry.
McAllen's sales-tax woes should be a warning to Brownsville leaders against placing all our economic development eggs (and funds) in on basket.


 Net Payment                     payment    Change      2016 YTD           2015 YTD      Change

 this Period                          last year

Brownsville   $2,806,115.00 $2,797,420.03  0.31%   $21,788,707.46   $21,303,478.01   2.27%

Harlingen    1,729,021.26  1,704,916.52    1.41%   13,276,387.44      12,943,980.47   2.56%

McAllen         4.515,754.15  4,656,457.85   -3.02%  35,994,601.39  37,622,086.48      -4.32%