The Patagonia Town Council on June 10 presented and approved a $6,929,139 budget for the 2027 fiscal year. The budget takes effect July 1.
Town Manager Ron Robinson said the budget accounts for a significant downturn in local sales tax. The 2026 fiscal year budget estimated sales tax revenues at $1,045,543, based on collections from the previous year, but actual revenues are tracking at $611,012 — a decrease of more than 41 percent. As a result, the 2027 budget estimates those revenues at $640,000.
Robinson said he first noticed the downturn last August and theorized that it is related to South32 busing in its workforce to the Hermosa mining project in response to complaints about increased traffic.
“I’m seeing all the buses that South32 is bringing in, and I’m seeing that these trucks and people are not driving to the park-and-ride and trading at the stores, not eating at the restaurants and spending money,” he said.
Robinson said he has spoken with South32 President Pat Risner about the declining revenue and hopes for at least a partial solution: “I said, ‘Hey guys, fill up the (Stage Stop) hotel, that’s our biggest draw.’ They’ve started to put up their contractors there. They’d had them staying in Nogales.”
Brenda Somoza, owner of the Patagonia Market, said the market has experienced a notable dropoff in business, which tracks with what she’s heard from other business owners.
“We all knew this was going to happen, it was going to hurt our businesses, and it did,” she said.
The market expanded its hours — opening at 4 a.m. to cater to South32 workers — and that’s where the impact has been greatest. “We took a big hit on that morning group we would get in,” Somoza said. “A few of the (contractors) are running vans instead of buses, so we’re still getting some.”
Somoza said she understands the community’s concerns about the mine’s impact, but it leaves business owners in a difficult position.
“I understand that it’s in the town’s best interests that our water, our air, our natural resources are protected, and I’m thankful that we have people doing that,” she said. “But I feel like nobody is taking into account the local businesses. If we do speak out, we get bashed. It’s really a double-edged sword.”
Somoza said there are likely other factors that play into the loss of tax revenues, and the arrival of summer doesn’t help matters.
“I think a lot of it is just our economy in general,” she said. “People are a little more cautious, not going out to eat as much, not spending as much.
“Summer is always very slow for the whole town. Those extra people coming in helped us get through this slow time.”
Robinson said in order to maintain a balanced budget, the most significant impact of the lost revenues will be on the town’s inability to add to its reserve fund, which is managed by the state treasurer and invested in conservative vehicles such as U.S. Treasury securities and government-backed bonds. He said local residents will not see a downturn in services.
“We started with $738,000 in reserves in 2019 when I started (as town manager); it’s over $2.4 million now,” Robinson said. “We’ll be drawing some of that down.”
He said other adjustments to account for the shortfall are the discontinuation of a lobbying contract — a savings of $24,000 — and the reallocation of a portion of Deputy Town Manager Carmen Fuentes’s salary to a $114,000 community investment and development agreement signed by South32.
Robinson said the town will continue to be proactive in trying to attract tourism dollars, such as enhancements at town parks and staffing at the Caboose Welcome Center. The town will also be installing larger, visually appealing street signs along Naugle Avenue.
“There’s a lot of things we’re trying to do,” he said. “I want people to come here, but I don’t know what two years from now looks like.”