July 24, 2012
Summit talks border economy's challenges
Read published article: Summit talks border economy's challenges
The following article, Summit talks border economy's challenges was written by Jared Janes for The Monitor (McAllen) on Tuesday, July 24, 2012.
Border communities must become more competitive at attracting Mexican customers to ensure economic stability in the face of state and federal budget cuts, McAllen Mayor Richard Cortez said Tuesday as he was flanked by mayors from other border cities.
In McAllen, where about one-third of the local economy hinges on spending from government entitlement programs, shrinking federal and state budgets will hamper economic growth, Cortez said during a panel discussion about economic challenges faced by border cities. But McAllen can make up the difference through measures to attract more Mexican shoppers, who represented about 36 percent of the city’s sales tax revenue last year.
“We have a great opportunity to make ourselves attractive and competitive to add the consumption” of Mexican shoppers, Cortez said. “We want those seeking goods and services in the United States to choose our border cities to do that.”
Cortez said border cities must work with state and federal government to take another look at the visa process to make it easier for Mexicans to legally travel here, must work to expedite traffic at border ports of entry, and must preserve sales tax rebate programs that attract cross-border shoppers.
Cortez made his comments during a border mayor panel discussion at an economic summit organized by the National Association of Latino Community Asset Builders, a group that represents nonprofit community development and asset building organizations. Other sessions at the summit included discussions on the economic impact of the Eagle Ford Shale boom and ways to leverage funding for community development along the border.
NALCAB executive director Noel Poyo said the annual summit provides a place for nonprofit executives, public policy makers and local elected officials to discuss ways to improve the border economy. Complaints from border nonprofits about their lack of access to capital at last year’s summit led the federal government to develop the Border Community Capital Initiative, a program announced in June that can fill in the financing gap for those groups.
Despite residents’ obstacles accessing health care or education and challenges brought on by Mexico’s drug war, border economies are seeing growth, he said. But the summit can help further by bringing together nonprofits that can act as an engine of growth with financial sources from the private or public sector.
“This is an economy that requires a particular understanding and is particularly misunderstood,” he said. “Nowhere else is making the connection between federal resources and border communities.”
Those resources include the Border Community Capital Initiative, a partnership formed between three federal agencies last month to provide credit, capital and financial services to underserved populations along the border.
The initiative is built around U.S. Housing and Urban Development grants of up to $200,000 for nonprofit community lenders and investors that serve colonia residents. Under the initiative, a border nonprofit could receive assistance with completing a market study to begin a lending business and then provide microloans to colonia residents.
By using a small infusion of federal funds, the federal government can increase access to capital in colonias that often lack access to traditional funding sources, said Don Graves, the executive director of the President’s Council on Jobs and Competitiveness at the White House.
“For the small amount of money we are able to provide, these nonprofits are able to leverage that up to five, 10 or even 20 times what the federal government does on its own,” Graves said of the Border Community Capital Initiative. “When you get the nonprofits who understand the community’s makeup and needs and you bring in the private sector, as well, it becomes an even more effective initiative or set of programs.”