As staff members are ramping up work on the city’s next spending plan, City Manager Sage Sangiacomo reported earlier this month that revenues have taken a significant downturn in the past year.
“On a quarterly basis, we receive updates from our sales tax consultant, providing estimates on the sales tax (revenues) coming in,” Sangiacomo told the council during its Feb. 1 meeting, explaining that the city saw “significant declines over the estimates” for the second quarter in a row.
“At this point, I don’t feel that it’s a recessionary trend, because that’s not what is being demonstrated across the state of California,” Sangiacomo said, pointing instead to something “that is unique to Northern California, which is the fallout of the cannabis industry. That is having a significant impact on companies that provide (products directly to cultivators such as) irrigation, fertilizer, and other materials, as well as secondary markets such as home improvement stores and farm equipment.”
The third level of impact, Sangiacomo said, is “the employment from that industry, and the lack of purchasing power when people don’t have those funds coming in for restaurants and normal living.” He again described the downturn in the cannabis industry as a “unique trend that is happening in Northern California that’s (affecting) certainly Mendocino County and Humboldt, and likely Lake and Trinity counties.”
As for what impact the reduction in revenue from the cannabis industry would have on Ukiah specifically, Sangiacomo described the city as “well-positioned with regards to our reserves, and also the surpluses that we built into this budget, in a conservative way, to ensure that we don’t have to have a knee-jerk reaction to declining revenues. But I will say that I suspect this impact will be long-term,” akin to other industry declines in Mendocino County, such as that experienced by the timber industry.
“The decline of the cannabis industry makes me think that we really need to work on another economic development strategy, and not just be passive about it,” said Ukiah Mayor Mari Rodin after Sangiacomo’s report. “And I think about the possibilities that go along with developing the Great Redwood Trail and tourism. That’s one thing I hope we can work on.”
When asked if the downtown could be a lingering result “from businesses that were shuttered during Covid,” Sangiacomo said he did not see that as a significant reason for the current decline in revenues, given that Ukiah had a fairly “resilient” economy that had not been as greatly affected by Covid as other cities that rely more heavily on tourism, “such as Napa or even Fort Bragg.”
“We have a little bit more resiliency (because of) the number of activities that we have going on, but I do appreciate (Mayor Rodin’s) comment regarding continuing to work on that resiliency, (because) adding additional items to our portfolio will certainly make a huge difference.” Sangiacomo said.
(Ukiah Daily Journal)
Articles like this make me wonder what happened to journalism. I can instantly think of follow up questions BEGGING to be asked:
How much is this “significant decline” in US dollars?
What percentage of the fiscal year budget is this decline vs. original revenue projection?
How much of the budget’s total revenue projection is for cannabis taxes?
How much of the “significant decline” is blamed on a cannabis tax miss?
Show a graph over time charting cannabis revenue projections vs. actual
Show a graph over time charting the cost of personnel and local government programs devoted to managing the cannabis road show.
How much are these “reserves” in USD? (This money was from all the “free” pandemic money borrowed by the federal government, right?)
What, exactly, is this “new economic revenue strategy” that’s mentioned? Assuming a miraculous new strategy is devised, when, exactly would it be implemented and when will new revenue appear as a result of its implementation?
Mayor Rodin expresses interest in making Ukiah more of a tourist spot, thanks to some future appearance of people who want to pay to stay in Ukiah to walk up and down the Great Hobo–er, Redwood Trail. However, City Manager Sangiacomo says Ukiah has been more resilient than the coast due to a hit on tourism there. Is tourism really a viable pillar strategy for our fair town? What are the risks of overloading hopes on tourism, which is subject to external, uncontrollable factors like a pandemic, recessions, and so forth? (Personally, I used to live in a real tourist town called St. Helena, which, during the tourist season could take you 30-45 minutes to drive across town amongst the throngs of visitors. Not looking forward to that!)
Anyway, I am looking forward to hearing some real reporting on economic issues that are facing all of us in our fair town.
What happened to journalism —?
Do you have any idea what a journalist is paid at a small town newspaper like the UDJ?
Well, buddy, you get just what you pay for, huh.
Who’d a thunk it?
Substack, that’s all I’m saying.