San Marcos Mercury | Local News from San Marcos and Hays County, Texas

May 4th, 2009
Local economy: sales up, jobs down

Sales taxes are up locally, but so is unemployment. Photo by Andy Sevilla.

By ANDY SEVILLA
Associate Editor

The San Marcos unemployment rate is inching upward but city officials remain optimistic as local sales tax revenue bounces back from a bleak decline.

Optimism from city officials about the city’s solvency contrasts with the troubles of private citizens. While unemployment in San Marcos has inched up, so have home foreclosures.

Tuesday morning, 125 Hays County homes are to go up in the May foreclosure auction, up from 117 in April and 100 in March. Among recent months, foreclosures peaked at 130 in February, up from 91 in January, 70 in December and 94 in November.

San Marcos city finance director Steve Parker said the unemployment rate for San Marcos is 4.6 percent, a whole percentage point increase from “3.6 percent a couple of months ago.” Compared to the national unemployment rate of 8.5 percent, Parker said San Marcos is “holding its own.”

Texas has an unemployment rate of 6.7 percent for the month of March, translating to a decline of 47,100 jobs from February, according to the United States Department of Labor.

“San Marcos’ economy is in much better standing than the state, and even than the region and the nation,” said San Marcos Mayor Susan Narvaiz. “San Marcos and Hays County have usually done better than the nation, and we’re seeing that.”

The Bureau of Labor Statistics reported the West South Central geographic region of the United States, which includes Texas, as registering the lowest jobless rate in the country for March at 6.5 percent.

“This region as a whole is holding its own,” Parker said. “And San Marcos as a whole is holding its own even better.”

Parker said the April sales tax in San Marcos was up $34,874, or 2.92 percent, up from a nominal rise last month.

Sales tax revenue for the city nudged into a .03 percent increase in March up from a 4.96 percent downturn for February. January also saw a loss of 1.63 percent, and December’s sales tax intake was down by 5.48 percent.

Parker said San Marcos city finances are unaffected by the recent decline in incoming revenue. He said San Marcos is “always prepared” due to the policies set forth by those in office.

“The city always budgets conservatively,” Parker said. “So when times like these happen, we can easily adjust.”

Narvaiz said San Marcos continues to see growth in several areas this year, although, she said, it has flatlined in others.

Narvaiz said city staff and councilmembers have implemented strategies for the city to stay afloat in the “worst of times” and maximize benefits when the economy is on the upswing. Narvaiz said budgeting conservatively is only one of the many factors contributing to stabilizing the San Marcos economy. She said others include expansion of the outlet malls, the opening of the Embassy Suites and city conference center, the city’s big sector of government (county, city and schools), and tourism.

“We’ve done a little in a lot of different areas,” Narvaiz said.

Parker said different elements keep the city’s budget “right on target.” Parker said a fund balance reserve is maintained continuously, and in fact, he said the city saw savings of $412,000 in the first five months of the current fiscal year.

“We’ve got some reserves built up,” Parker said. “We can weather the storm. We have policies in place that dictate during any situation.”

The San Marcos community is faring better than most, according to Parker, in part because residents live within their means and the cost of living in the city is low, adding that “we have pretty decent salaries in the area.” Parker also said San Marcos property appraisals are “right on target” and he said property values have not declined.

Social services in San Marcos are still funded and cutbacks are not expected. Narvaiz said city staff has been directed to increase funding for social services by three percent in anticipation of more demand.

“City council is watching things carefully,” Narvaiz said. “We’re blessed to be in a position to give our citizens the services they want and need.”

Narvaiz also said electrical service increases and tax rate increases are not in the forecast.

“Our objective is to not put any more burden on our citizens,” Narvaiz said. “City council is prepared to make changes that are needed.”

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