RAYMONDVILLE — City officials are braced for budget cuts that could include layoffs.
Walmart’s decision to close Raymondville’s store will cut off one of the city’s biggest sources of sales tax revenue.
But officials have not determined the amount of tax revenue the store generates.
“There are going to have to be some cuts somewhere,” City Commissioner Clifton Smith said yesterday.
Mayor Gilbert Gonzales said officials do not know if cuts in sales tax revenue could force employee layoffs.
“I’m praying not,” Gonzales said. “It all depends on how it’s going to impact.”
Last year, commissioners cut deep into their budget after the closure of the 3,000-bed Willacy County Correctional Center slashed about $600,000 in water sales.
“We already pretty much cut to the brim,” Gonzales said of last year’s budget cuts.
Smith said officials may consider budget cuts in such areas as equipment purchases.
But Gonzales said officials already have delayed equipment purchases.
“I don’t know how much room we’ve got,” Gonzales said.
He said officials will not know the amount of sales tax revenue the store generates until the state Comptroller’s Office releases the city’s monthly sales tax collection reflecting the loss of Walmart’s sales tax dollars.
But more than 10 years ago, officials projected the store’s sales tax revenue.
When Walmart opened its Supercenter here in 2005, officials projected the store would generate about $400,000 in annual sales tax revenue.
When the Supercenter opened, Walmart closed its small store here that banked about $140,000 in annual sales tax income.
A history of the city’s sales tax collection shows jumps in sales tax revenue from 2004, 2005 and 2006.
In 2004, the city’s sales tax collection stood at $892,966.
When Walmart’s Supercenter opened in 2005, the city collected $958,831 in sales tax revenue.
By 2006, the city’s sales tax collection had climbed to $1.1 million.
Last year, the city collected $1.4 million in sales tax revenue.
Last week, Walmart announced it would close Raymondville’s store Jan. 29, laying off about 110 employees.
Gonzalez said about 55 employees work full-time.
The world’s largest retailer announced the closing of 269 of its least profitable stores in the United States and Latin America, including a Brownsville store on Padre Island Highway.
News of the Raymondville store’s closing came nearly a year after the Willacy County Correctional Center shut down, laying off 400 employees.
The prison’s closure plunged Willacy County into a financial crisis, slashing a third of the county’s $8.1 million general fund budget. As county commissioners tried to offset a monthly $220,000 shortfall, budget cuts eliminated about 25 jobs, forcing 16 layoffs.