McAllen marks year of positive sales tax revenue

The prediction came in 2016: Get through Thanksgiving the following year. McAllen had seen months of declining sales tax revenues, something the city relies on heavily.

La Plaza Mall, the city’s sales tax jewel, was undergoing a $50 million expansion, set to finish, in part, by the holiday season in 2017. Mayor Jim Darling and city commissioners felt pressure to keep a tight budget, yet they knew that they needed to invest.

“You never make money by cutting,” former City Commissioner Richard Cortez told his colleagues and city staff during a workshop in the spring of 2016.

Commissioner John Ingram took Cortez’s point, but wanted to be cautious. Sales tax revenue, which accounts for roughly 40 percent of city revenue, had been declining, and he didn’t want to spend taxpayer money unwisely.

City Manager Roel “Roy” Rodriguez was cautiously confident.

“Revenues are going to be flat for a while,” Rodriguez said in an April 2016 interview. “But if we can just get through Thanksgiving next year, I think we’ll be OK.”

With the department store H&M as the anchor to the mall expansion, along with some dining establishments and smaller stores, the new wing of La Plaza opened a year ago. Since then, sales tax has increased substantially, after 22 months of decline.

“I can’t believe I was that bold,” Rodriguez said in an interview this week.

One large jump this year was in February. Revenue jumped $327,814 from February 2017 to February 2018. This marked an 8-percent increase after the city collected $4.54 million in February 2018 compared to $4.22 million during the same month the year before.

The uptick has continued throughout the year, which even gave city leaders some pause.

“It can’t continue forever, but we’re not done yet,” Rodriguez said.

Darling has pointed out the revenue growth at commission meetings in recent months, but the city has not been overly boastful about the numbers. There have not been press releases pushing the growth.

Rodriguez and other city leaders haven’t made any more bold predictions, but the city manager offered a glimpse a year removed from the sales tax turn.

“Some of the construction we’re anticipating has still not finished,” he said. “I don’t think we’ve seen our best days yet.”