Michael Feinstein, Mayor of Santa Monica
Special to the Mirror
Where do we go, right here at home, after September 11? Our confidence was shaken, our sense of peace violated and our economy set back on its heels.
Today, two months later, our local economy is in significantly worse shape than it was just six months ago, when we were voting on the 2001-2002 fiscal year budget.
Even before the tragic events of September 11, it was clear that our nation had entered a recession that was more rapid and severe than had been anticipated. The 9/11 terrorist attacks made things a lot worse.
Two pillars of Santa Monica’s diverse economy have been severely affected by the events of September 11 -– income from tourism and sales taxes. As a result, people are losing their jobs, businesses are in danger of closure and city revenues have plummeted.
Most estimates suggest that it’ll be nine months to two years before things are back to normal – if they ever will be after 9/11. During this difficult transition, how can we best preserve local jobs and businesses and continue to fund vital city services?
• The City must find ways to tighten its belt and reduce spending, while still preserving essential services and addressing major priorities.
• We must spend money as individuals to sustain our local economy, while continuing to promote values of environment, social responsibility and community-serving business.
• We must replace at least part of the significant tourism revenue we’re losing because some visitors from this country and abroad have stopped flying for the time being, by encouraging people from this region as well as friends and relatives to visit and enjoy our beautiful city.
State of the Local Economy
As city revenues from sales and bed taxes have dropped, Santa Monica may face a revenue shortfall of $7.9 million to $17.0 million for the current fiscal year. We may have a similar shortfall next year as well.
The California state government may also take away funds from municipalities as part of efforts to reduce its own $8 to $14 billion shortfall. In the early 90’s, in similar circumstances, the state took Property Tax revenue from all cities and counties, including Santa Monica. The current value of the tax money the state took from us is about $4 million annually. The state is now considering taking $1 billion of Motor Vehicle in lieu tax revenue from all cities. Santa Monica’s share of this new state “taking” would be about $3.1 million a year.
What the City is Doing
• Trimming Costs, Preserving Essential Services
Despite the immediate financial difficulties brought about by macro-economic events and forces, prudent financial policies including years of fiscal discipline have positioned the City to sustain essential services while cutting costs during a possible two-year revenue shortfall. A cost reduction program is underway with an update due at the January 8 City Council public hearing on budget priorities for fiscal year 2002-03.
• Promoting Local Business
The City Council has invested an extra $200,000 from fiscal year 2000-01 budget savings to a joint project of the Santa Monica Convention and Visitors Bureau (CVB), Bayside District Corporation, and the Main Street, Montana Avenue and Pico Boulevard business improvement districts called “Visiting Friends & Family,” to promote visiting and shopping in Santa Monica, targeting residents and the wider regional market. As part of this effort, the Santa Monica CVB is also piggybacking with other CVBs in the region on a $10 million regional radio and print advertising effort in California, Arizona and Nevada.
• Supporting Local Workers
After 9/11, the Federal government acted immediately to provide financial aid to the airlines, as keeping the nation’s transportation infrastructure intact is vital. But relief must be available to workers as well as shareholders. Workers must be part of the recovery, not victims of it.
There has been widespread concern that some local businesses are using the 9/11 crisis to lay off workers because of their union organizing histories. Either these workers will not be rehired or will be rehired as “new employees,” without seniority, and at lower wages.
At the request of the City Council, staff is preparing an ordinance to protect the right of local workers laid off as a result of the 9/11 attacks, to return to their jobs as their respective industries recover from the current economic downturn. This will be on the Council’s agenda November 27.
The City Council has already passed a resolution urging the state to extend expedited unemployment benefits to all eligible tourism workers, as have already been extended to laid-off airline and airport workers. The Council also directed city staff to work with appropriate agencies to support relief efforts for newly unemployed Santa Monica residents and workers.
What We Can Do as Individuals
All across our nation, people are being urged to shop patriotically’ to stimulate the economy. The timing on this is critical, because many companies earn a substantial portion of their total year’s income during the period between Thanksgiving and New Years.
Part of “getting back to normal” does mean spending what you would have spent in normal times, particularly on necessities, and not refusing to spend just because of 9/11. But it doesn’t mean to go out and waste. That’s not good for the environment or your pocketbook. So how do we make this a better world — and show our power to do so on a local level?
• Buy Local
Dollars spent here are much more likely to remain and circulate here, having a positive ripple effect on the local economy. Profits are recycled as local businesses purchase goods and services from other local businesses, locally employed residents spend more of their income right here at home and the community profits as a whole as income from local sales taxes rise.
When we buy from locally owned businesses, we also promote local decision-making by people who live in the community and are familiar with what it takes to promote its well being.
The greater our local self-reliance, the less vulnerable we are to the whims of global financial markets, world events, and even terrorism. This is sound economics even in normal times.
• Buy Environmental
State, national and global governments are corrupted by the politics of energy, particularly those of oil. Let’s answer with a world based upon renewable energy coupled with energy conservation and efficiency.
Don’t buy a polluting, gas-guzzling SUV. Buy a fuel-efficient car instead, perhaps one of the new gas/electric hybrids. Did you know that Santa Monica sells more gas/electric hybrids than anywhere in the nation?
We can also become less vulnerable to the greedy manipulations of unscrupulous price-gouging electricity power generators, by increasing insulation, purchasing energy efficient appliances — from light bulbs to refrigerators, and putting solar panels on every roof.
Local economic self-reliance also is critical to healthy food production. Promote sustainable regional agriculture by visiting Santa Monica’s four weekly Farmers Markets (on Arizona, Pico and Main St.). Make sure you buy organic produce while you are there.
We can also influence the marketplace by reducing and eliminating the amount of hazardous chemicals we buy. The City has an educational program right there on store shelves that identify non-toxic alternatives. Support stores that carry them and ask stores that don’t to do so.
• Buy Socially Responsible
Support businesses that give back to the community through local charities. Support businesses that pay living wages at home and abroad. Support businesses that hire the disadvantaged. Support businesses that have revenue sharing and cooperative ownership opportunities for their employees. Don’t support businesses that employ sweatshop practices.
• Give to Others
The American Red Cross of Santa Monica and the Santa Monica Fire Department sponsor and organize the Share the Holidays program, which benefits local low-income children and families. Donations of unwrapped new gifts such as toys, books and clothing are accepted from November 26 through Christmas Eve. Youth volunteers deliver donated items to local low-income families, battered women and children shelters, homeless shelters, mental health and rehabilitation centers, and community service organizations.
The Big Blue Bus annual Food Drive to benefit the Westside Food Bank reaches thousands of people every year with much needed provisions. Please consider making a donation of dry or canned food. Santa Monica Fire Department/Red Cross toy collection and Big Blue Bus/Westside Food Bank food collection boxes can be found throughout the shopping districts and on Santa Monica Pier.
• Encourage Friends & Family to Visit
With air safety and convenience jeopardized in the consumer mind, Santa Monica is greatly affected not only in the international market (accounting for $523 million of the $788 million in total visitor spending for 2000), but the domestic leisure and business travel markets as well. The City is projecting a 15% decline in hotel bed tax revenues for fiscal year 2001-2002.
To help off set this loss, the Visiting Friends & Family program has been devised and directed at Santa Monica residents, friends and relatives. With promotions like “There’s no Place Like Home for the Holidays” “Shop Santa Monica!” and “I Wish I Had An Extra Bedroom!” this program offers deeply discounted rates, gifts with purchases and/or package deals to visit Santa Monica’s hotels and to enjoy our local dining, theatres, retail and other attractions.
Community open houses will be held on December 1, 7, 8 and 9 to re-familiarize residents with our hotels and shopping districts. Contact the CVB at 319-6263 or visit www.santamonica. com for more information.
Santa Monica is a beautiful community that we can be proud of. Now is a great time to show it off to our friends and family and support the local economy in the process.