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Sales Tax Revenues Down in the Rio Grande Valley

3 years 4 months 1 week ago Friday, March 24 2017 Mar 24, 2017 March 24, 2017 8:10 PM March 24, 2017 in News

MCALLEN - The Rio Grande Valley's relationship with Mexico is evident in front of the McAllen city hall, where flags from both nations fly proudly. 

McAllen Mayor Jim Darling said right now that relationship is hurting. He told CHANNEL 5 NEWS, "We're probably hurt more than any place in the United States by the rhetoric with Mexico."

Sales tax number started going down last year as then-presidential candidate Donald Trump inched closer to victory. 

McAllen was down $3 million in sales taxes in 2016.  The Texas Comptroller website shows sales taxes are down more than six percent from the same time frame last year. Some of the problem can be attributed to the high currency exchange rate between the Mexican peso and the U.S. dollar. 

"I think the downtown is more affected by the peso than rhetoric probably," Darling said.

However, the McAllen mayor blames low mall sales on the words coming out of Washington. He told us, "We know a portion of that for sure is because of people's animosity towards the rhetoric from Washington."

Mercedes also saw a 13-percent sales tax drop from the same time last year. Employees said the slow down is alarming. One woman we spoke with on the condition of anonymity told us she worries about her job. 

"A lot of people are asking questions, because there are rumors going around that, at least, by the end of the year we'll have 20 stores close total," she said.

She added violence and low peso values in Mexico slowed down sales in the past, but that isn't the current issue. 

"On top of the peso and the violence, I think I would really say that what it is right now is just protesting," she said. "We were used to violence and that going on. We would see the hits, but they would come back. And now it just feels like they're not coming back at all."

The employee said regular customers tell her they don't feel welcome in the U.S. anymore. McAllen plans to change that. Darling said a new $250,000 marketing campaign aims to bring shoppers back. 

"We'll do billboards, digital and social press. Multimedia things," he says, "I think the theme is 'Siempre Amigos.'"

The employee we spoke with said she hopes Mercedes does the same. 

The cost of McAllen's marketing campaign will be paid for by the city of McAllen, the chamber of commerce and the economic development corporation. 

Rio Grande Valley Premium Outlets in Mercedes denied our request for an interview. The Mercedes Economic Development Corporation did tell CHANNEL 5 NEWS traffic at the outlets is down. They added the Mercedes EDC is also planning to market in Mexico.

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