AZMEX POLICY 28 MAR 2019
Note: graphic, etc. at link. As seen below, legitimate visitors have no problem with a secure border.
Fears of impact from border 'hardening' not borne out in sales tax stats
By Nick Phillips
Nogales International Mar 21, 2019 Updated Mar 26, 2019
https://www.nogalesinternational.com/news/fears-of-impact-from-border-hardening-not-borne-out-in/article_f9f9a38e-4c39-11e9-a65a-eba228ef7604.html
Sales tax graphic
Shops catering to Mexican shoppers line the first block of Grand Avenue in Nogales, just north of the Dennis DeConcini Port of Entry, seen at left.
Photo by Jonathan Clark, graphic by Priscilla Bolaños
Sales tax revenue generated at local retail outlets during the past holiday season declined slightly for the City of Nogales,
but inched upward for the Santa Cruz County government compared to the previous year.
Though the city's stats revealed an incremental year-over-year decline, the numbers did not show evidence of the dire effects some had feared
following the military's "hardening" of the local border and a weakening Mexican peso in November.
The modest changes suggest that the economic impact of the border militarization – which included the visible presence of Army troops,
the installation of concertina wire on the border fence, and the use of razor wire and shipping containers to restrict access at the ports
– has been limited, at least for now.
Transactions made during November 2018, December 2018, and January 2019 generated $2.20 million in sales tax revenue for the city.
That number was down from $2.26 million for the same period in 2017-18 but higher than the $1.86 million collected in 2016-17.
"As far as our budget's concerned, I'm not worried, because we're more or less within where we should be,"
said Jeanette Parrales, city finance director.
For the county, sales for the 2018-19 holiday period brought in $736,097 in tax revenues,
up from $713,798 in 2017-18 and $676,044 in 2016-17.
In November, concerns about revenues led the Nogales City Council to halve the year-end bonuses of city employees.
At that time, councilman Marcelino Varona said that he was worried that the activity on the border could negatively impact tax collections.
The council ultimately voted to cut employee bonuses from $1,000 to $500.
Speaking on Thursday, Varona said that the council would consider granting city employees an additional $500 at its next meeting, on April 3.
"Right now, my indication is that the revenues are enough to go ahead and make that $500 (payment)," he said,
citing a conversation he had with city officials including Parrales.
A weak peso was another cause for concern at that time, as the exchange rate broke the 20 pesos/dollar threshold for several weeks
in November and December 2018, but the rate retreated back to approximately 19 pesos/dollar in January 2019.
That represented a minimal change from the 2017-18 holiday season, when the exchange rate fluctuated around 19 pesos/dollar.
City officials generally estimate that 60 to 80 percent of local tax revenue is generated by Mexican shoppers.
Tax revenue
Elia Roxana Molina Tejeda, 41, of Nogales, Sonora said that she frequently shops in Arizona and
recent military activity in the downtown area did not affect her shopping.
Photo by Nick Phillips
On Wednesday, shoppers from Mexico making purchases in the Morley Avenue retail district included
Elia Roxana Molina Tejeda, 41, of Nogales, Sonora and her 22-year-old daughter Gabriela Rodriguez.
Molina Tejeda, who had bought a new suitcase and some handbags, said it is her habit to shop in Arizona,
and the militarization of the border doesn't affect her.
Ignacio Jacobo, 61, had bought groceries for his sister at Food City.
He said that the prices were cheaper in Arizona than in Sonora and the concertina wire didn't bother him.
"Maybe (it affects) people from farther away, but I live here," he said.
END
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