By Karl Terry: Freedom New Mexico
Portales’ economy seems to be defying national trends along with localized concerns of a slow-down as gross receipts tax collection grew in 2007.
With better than 73 percent of the city of Portales’ budget tied to GRT, the monthly collection reports are of special interest to city officials looking for trends.
The first six months of the 2007-2008 budget year, which began in July, show that collections have been over budget each month with the mid-year total $385,949 over projections.
Compared to the 2006-2007 actual collections, those amounts show an even more favorable trend with revenues up $746,818. Only one month in the six, November, showed a drop. The reports for each month actually reflect the sales in the city two months previous.
Nationally the economy has recently shown signs of softening and the housing construction has dropped, according to recent Associated Press stories. Those pressures, along with a predicted trough in the eastern New Mexico economy tied to a draw-down in personnel at Cannon Air Force Base as it transitions to a new mission have had local officials concerned. None of those things seems to be affecting Portales right now, however.
“I really believe we aren’t quite as affected as Clovis is by Cannon,” Portales Mayor Orlando Ortega Jr. said. “Portales definitely has a diverse economy and that’s what helps us in these times. Our economy is actually healthy and growing.”
City Treasurer Marilynn Rapp said the numbers show that Portales has received a significant boost from recent construction activity, including projects ongoing at Eastern New Mexico University and home construction. She and City Manager Debi Lee say that construction windfall is nice for the budget, but they construct the city budget conservatively so that services won’t be affected if it’s not there. Still they point to a steady growth in all segments of the gross receipts tax, including retail as the sign of a diverse and healthy economy.
Rapp said the retail segment of GRT collections dipped to an average of $161,680 in 2006-2007, but appears to have rebounded this year with the average coming in at $1 80,000 so far.
Rapp said home-grown businesses seem to be doing well in Portales, and that coupled with the opening of a new strip mall soon near Wal-Mart should keep retail rising steadily as it has over the last 10 years.
“I don’t think there’s a worry for retail right now in our town,” Rapp said.
Lee and Ortega said while it could well be that collections from construction spending may have topped out for the foreseeable future, they expect Portales to continue to see solid amounts of construction.
Lee pointed out that several new subdivisions in and around Portales will contribute to keeping that segment of GRT collections strong.
“We’re not building in big numbers like other communities, but we’ve been steady,” Ortega noted.
“We’ve worked hard at growing our community and it’s paid off,” Ortega said.
“If you look at the trends over the last 10 years, we’ve got a pretty steady trend,” Lee added.
Both officials said that they’ll continue to budget conservatively in the meantime. They are hopeful that the efforts of new economic development recruiter will soon be paying even more dividends.