Economics: Building The Local Economy First.

As we begin to come out of this prolonged recession, a number of sectors of the economy are showing improvement. Locally, for the hospitality industry, sales are better in 2010, than for the same period 2009. Restaurants and hotels are now seeing volumes pick-up.

However, there are some sectors that are lagging and still exhibiting difficult times. Retail and local government are two examples. And then there are the un-employed. Napa County is better than 90% of the state - with only a 9.0% un-employment rate. Those one of every eleven workers are hurting and still feeling helpless, trying everything possible to make ends meet.

Across the country, communities are coming together to fight this recession through “buy local” or “think local first” campaigns. Businesses come together through local chambers to invest and support each other and promote local businesses as a way to boost their local economy.

The theory behind such campaigns is simple, focus spending locally to build local businesses and thus increase local jobs. While we can’t do much for the national economy, we can certainly try to improve the local economy. As a consumer and a small business it means making a conscious effort to spend locally. We must remain price conscious, but understand that sometimes a small premium is often worth it in the long run. In the Napa Valley, we have historically operated on the “local first” mentality. Our businesses have roots that run deep whether it’s a winery, construction company or local grocer. The problem is that during these tough times we become fixated on a short-term solution. Seeking to cut costs, we go outside our community searching for the low bid. This however comes at a cost. Not only are we taking our sales tax dollars and dropping them in the neighboring communities, but we are actually damaging the local businesses. I have seen local contractors and service providers being passed by - for local government projects outsourced to cheap labor from miles away. Out-of-area construction companies giving low unrealistic bids to land a job with no ties to the community, only to leave just as quickly as they came.

I feel that it is important for us to be conscious of our local businesses when shopping. The recent state of the city for April 2010 indicated sales tax revenue is projected to be $1.3 million less than expected for 2009/2010 and $1.2 million less than expected for 2010/2011. On top of this real estate values have dropped 41% since 2007, transient occupancy taxes are down, and permit revenue is also down. Looking at this summary it is clear something needs to change, our local economy needs to improve and it starts with us. It starts with residents and local businesses coming together and supporting each other. We need to increase the spending locally so that we can begin to turn this economic recession around. We need to get in the habit of buying local and supporting local development, so we can continue to keep that unique beauty we are so used to.