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Higher taxes, longer security lines to cross border hurting US businesses

Higher taxes, longer security lines to cross border hurting US businesses

WASHINGTON: Martha Isabel and Guadalupe Velasquez had spent two hours waiting to cross over a pedestrian bridge from Mexico to Nogales, Arizona. Once they emerged from the long line, their money didn’t go as far as they would have liked because of an alarmingly high exchange rate.

“It’s difficult because it comes out the same as buying in Mexico because the dollar is so expensive,” Martha Isabel said. “But still, some stuff is cheaper.”

The exchange rate and long security lines have caused stores and the tax revenues in border towns of Nogales and Douglas to take a hit this holiday season, typically a busy time as Mexican nationals buy popular toys and electronics that are much cheaper in the U.S.

Fewer people are making the trip this year, deterred by the lines and the high exchange rate of up to 14.70 pesos per dollar. The lines are often long because every person is screened as they come in, and, despite fewer shoppers this year, thousands of people still cross into Nogales daily.

The fortunes of the border towns are deeply tied to Mexican shoppers. In Douglas, 65 percent of the city’s revenue comes from sales tax, and a vast majority of that money comes from Mexican shoppers, Mayor Danny Ortega said.

In downtown Nogales, dozens of stores line Morley Avenue, selling clothing, toys, electronics and more, usually at discount rates and often in mass. Sales people standing on sidewalks advertise their stores in Spanish, and large signs show the low prices shoppers can find — $5.99 for a turtleneck shirt, for example. The stores are feet away from the pedestrian crossing.

At his 2,000-square-foot clothing and shoe store, Alfredo Enriquez said he often hears from frustrated customers who waited hours in line at the Dennis DeConcini Port of Entry to cross into the U.S. He usually hires about eight people during the holidays, but this year he can keep only two people on staff.

“This is something very critical. At the end of this month I’m gonna have to close,” Enriquez said.

Bruce Bracker, the chairman of The Greater Nogales and Santa Cruz County Port Authority, says the group has been working with CBP for many years to expand ports of entry. The government recently completed a $244 million expansion at the Mariposa Port of Entry in Nogales, about four miles from downtown. The port now has a dozen car lanes, a bus lane and the capacity to process more than 4,000 trucks a day.