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November 19, 2007
The Producers
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| Image: The top 25 sales tax producers in Chico
in Q2 2007, in alphabetical order. Notice: Finance Committee is holding a public forum tonight in the Council Chambers (6:30PM, see web site for more details). Here in Chico we often discuss the need to improve downtown as a business environment as well as the need to retain college educated youngsters with an improved job market. These are common points of economic growth concerns. On the other hand we have a vocal portion of the population that is antagonistic towards some corporate giants and at times automobile users. When 43% of our General Fund income comes from sales tax, I think it is important to note who the sales tax producers are. Companies who produce income that will pay a portion of the $30,000 green-house-gas emissions study are automobile and petroleum sellers. In fact the producers of money that pay for our police, fire, planning, and even health insurance for our City Councilors include Wal-Mart, Costco, and all of our major automobile retailers. Building and home improvement companies like Meeks, Lowes, and Home Depot contribute, as do fine fashionista stores like Mervyns, JC Penny, and Gottschalks. To get a feel for the difference in economies go stand in front of the Saturday Farmer's Market in the morning, and then stand outside of Costco in the afternoon. In the morning you'll see consumers lugging around tangerines and squash that contributed nothing to offset local government spending, and in the afternoon you'll see big screen TVs and 10-packs of blue jeans that do. Personally, I'm not a very good consumer. I don't have an offal lot of "stuff"(catch the word play...genius). I've been to the Farmer's Market a dozen times in the last year, and travelled to Costco just once a couple of weeks back. I bought a Polish dog... big spender. With our budget problems Chico is in uncharted economic waters where reefs abound. We should pay attention to the wind that fills our sales (catch the word play... more genius). Some aspect of our economic planning should focus on the health and welfare of the top 100 companies that produce sales tax income. Paying extraordinary attention to products like the Chico Bag may feel good, but will have no widespread economic benefit. However meeting with the top 25 sales tax producers and asking their opinion of where the city could help them produce more might actually create income to city coffers. Q2-2007 Sales Tax Report: (see report here, hard to read, sorry) Sales tax for Q2-07 was up 2.3% compared to Q2-06. Butte County gross receipts grew by 0.1% during this time frame. Growth occurred in the restaurant and hotel sector and rising fuel costs created growth in the fuel and service station sector. Annexation is described as the reason for a significant growth in contractor sales, I think that's debatable. Income from the leading producer, new automobile sales, was down. As were home furnishing and building supply sales. Shrinkage in these sectors offset the growth experienced in other areas. Reduced sales tax income growth, state government taking money from local government, and union negotiated benefits are considered the primary cause of Chico's budget deficit. The city is not admitting to high wages being a cause. |
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| Lon "the Councilornator" Glazner
Debate Forum: I
would like to thank everyone that came to the Global Warming debate last
night.
The porcupine incident was unfortunate and Mr. Cold Miser was released
from Enloe this morning with minor abrasions. Tonight we're holding a philosophical discussion on Chico's economic direction. Again we've found two exceptional economic leaders who both promote different views on the economy. I hope you can all attend. The flyer is posted below. |
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CI Challenge: Can you guess what it is? Winner: Trevor Hastings, see comments below for the answer. |
Posted by Lon at November 19, 2007 08:30 AM
Comments
It's a red ford F-250.
brain hurts.
Posted by: TrevHastings at November 19, 2007 08:47 AM
F-150 sorry. stupid numbers.
Posted by: TrevHastings at November 19, 2007 09:11 AM
CIC - Looks like half of a Ford pickup. Are you trying to say our auto sales have dropped by half? BTW, I bought a new car from a local dealer last year. I think I gave them a pretty good deal because I wanted to keep my money local. Considering the deal and service, I don't know if I would buy from that dealer again. If our councilmen really want us to shop locally maybe they should encourage more and better retail. We really need something a little more upscale like Macy's (Redding) or Dillards. Unfortunately, I met a Dillard's exec who said that Chico would never get one of their stores.
Posted by: Sean at November 19, 2007 09:18 AM
Macy's is not a good idea. I would never find Marissa again. I don't even know what Dillards is. that Dillard's rep sounded kinda spiteful against Chico.
Posted by: TrevHastings at November 19, 2007 09:46 AM
Trev,
Dillard's has similar quality to Macy's. Started out in the South, nearest locations to us are Reno and Stockton. The exec was just being honest. There is not much upside for those retailers. They know that our market is a small regional one and we're too close to Sacramento (just like the airport). They know that we will drive to Sac to shop.
Posted by: Sean at November 19, 2007 10:15 AM
I think the reality that Chico is a small regional market is a good point to make. The pie is only so big, and making it bigger bumps up against the realities of Chico's growth limitations. This dovetails with the discussion of 2 Wal-Marts. Does Wal-Mart believe that there are uncaptured sales that it can tap into with another store? Or do they believe that they can pull sales from competitors with a second store? I doubt they would seek another location in Chico if they felt it was financially unviable. Unless the whole purpose of proposing a 2nd store was to smooth the way for an expansion at the existing store, by making that the lessor of two evils (in the minds of some people).
For Chico, not protecting the advantages we currently have as a retail hub could cause pretty severe problems. There are competing interests with Chico's government.
For example, the County has requested a share of development impact fees from the City, and the City has expressed an interest in renegotiating the sales tax sharing agreement in place at the old mall. I doubt either one of these requests will be honored. Should that relationship turn really sour, and should Chico raise its sales tax, couldn't the county plan an automobile dealership hub between Chico and Oroville? How hard would it be to entice that sector to move a few miles up the road, pay less taxes, and transfer all of that income to the County?
That's not a totally realistic scenario, but if incentives evolved, it could become one.
Lon
Posted by: Lon at November 19, 2007 10:34 AM
Sean, that is kinda odd, as I used to live in Reno. Is it a recent development? I used to work for a catering biz there, doing deliveries during the week and catering on the weekends and sometimes evenings. So I was all over the city. But that was back in 2000-2001.
Posted by: TrevHastings at November 19, 2007 10:40 AM
Trevor,
Click on the "SHOP: GOLDEN GLAM" link if you're looking for something to get me for Christmas.
Lon
Posted by: Lon at November 19, 2007 10:47 AM
i'm scared...
Posted by: TrevHastings at November 19, 2007 11:19 AM
Trevor,
You should be scared, but you should also be happy. You are the CIC challenge winner. That is the Ford F-150.
"The Ford F-Series has been the best-selling vehicle in America for the past 24 years and the best-selling truck for the past 29."
I think most people would have assumed that a foreign car manufacturer would hold that title, maybe a Honda or Toyota. But nope, it's not the fuel efficient green machines that are winning buyer's hearts, it's the lowly old truck that Americans shell out the green back for.
Lon
Posted by: Lon at November 19, 2007 02:09 PM
I have a truck.... Hmm.. I wonder what make and model that baby is? Oh thats right.. Duh??
Ford F-150. It is amazing how many you see on the road after you buy one for yourself....
Posted by: mark at November 19, 2007 02:59 PM
yay!
Yeah, I would rather have a nissan 4X4 or a toyota truck than a ford. but I have an eye for vehicle designs, that and I dig through craigslist's auto's classifieds constantly, looking for that irresistable deal. Looking for a classic car in ok shape for around 2 or 3000.
I inherited my mom's knack for finding the best deal on earth.
Posted by: TrevHastings at November 19, 2007 02:59 PM
A Ford? I was going to guess "Horta"
Posted by: Anthony at November 19, 2007 03:34 PM
Trevor,
Contact Gregg about his Dodge Dart. I think it has homemade seats, but that's part of its magic. Plus you can say it was once owned by a famous artist. In fact, until recently I believe it was his muse.
Lon
Posted by: Lon at November 19, 2007 03:58 PM
What year is it?
I will definitely do that.
Posted by: TrevHastings at November 19, 2007 04:05 PM
Trevor,
There's no need to talk to Gregg about it, I can sell it to you for him. I'll even throw in his BMW. What the hell, you can even have his toaster oven.
I don't think his Dodge is for sale. I think he may be making a move to be NorCal's next Cal Worthington. Bet on it!
Lon
Posted by: Lon at November 19, 2007 04:47 PM
oops. Your about a half hour too late. My fingers move quick. =P
Posted by: TrevHastings at November 19, 2007 04:59 PM
Trev,
Dillard's has similar quality to Macy's. Started out in the South, nearest locations to us are Reno and Stockton. The exec was just being honest. There is not much upside for those retailers. They know that our market is a small regional one and we're too close to Sacramento (just like the airport). They know that we will drive to Sac to shop.
Posted by: Sean at November 19, 2007 09:37 PM
Lon,
I thought maybe Ax would chime in about the farmers mkt comment, but since he hasn't guess I'll throw in 2 cents. While there are very few taxable sales at the mkt shoppers are putting money directly into local farms that in turn spend money in Chico/ Butte cnty. And some of the pseudo-capitalists like myself can't go to mkt without also stopping at a few stores downtown. As an added bonus you can sometimes spot celebs like the Mayor or the head planning commish.
Posted by: Sean at November 19, 2007 09:50 PM
Hi Lon,
I have been busy stimulating the economy in Chico through my small business, and therefore slacking on my volunteer job as campaign poster critiquer. I know it's late, but nice use of alliteration.
Best,
Tempra
Posted by: Tempra at November 20, 2007 06:30 AM
Sean,
I am a big supporter of the Saturday Farmers Market. It is one of the most important features that the Downtown has.
But I think you should ask the next vendor you purchase from where they are from. I bet you will be surprised.
I would bet that most are from outside the area and are just in town for the day. They load up their trucks and hop on a farmers market circuit around the northstate.
I haven't asked lately but a couple years ago I met a avocado seller from S. Diego and a strawberry vendor from S. Maria. I don't think we can grow the variety of things that we demand.
I even question whether you can call vendors from Oroville, Willows and Red Bluff "local". All 3 of those towns have at least 1 Walmart that is gobbling up the Mom and Pop character of those towns.
Maybe instead of a "Certified Organic" label, we should have one that says "where do you spend your profits" label.
Posted by: tj glenn at November 20, 2007 07:12 AM
duh, I said that wrong. I hope I can clarify myself.
I was really questioning whether or not the vendors from Farmers Market are really spending their money locally or are they spending it in their towns outside of our county. They have Walmarts in their county too and don't need to spend their money in our town. Especially if we increase the sales tax disproportionately to their county.
I didn't mean to pick on Walmart either. They are much less of a physical impact on their building site than a shopping mall does. They are much more efficient for consolidating space and an easier shopping experience. When your kid says they are going to check out the toy section, you know that it is only a few aisles over rather than the toy store at the other end of the mall.
Unfortunately, we pay the price of shopping efficiency and ease of use with a loss of local character.
The downtown should change to accomodate those weaknesses, but too many fear change and in looking at the history of development in Chico it is understandable to see why they feel that way. The trouble is getting them to realize that "no change" is even worse.
Posted by: tj glenn at November 20, 2007 08:19 AM
Sean,
I like and appreciate the Saturday Farmer's market. I'm not really concerned whether the produce is local or entirely organic, as long as it is fresh.
I think it is important for people to see where the money comes from that supports our existing city services. Once that source is recognized I think it is folly not to cultivate and support that source when suffering significant budget problems. Economic development at a company would be focusing on and augmenting what is working for you.
Going back over a previous calculation, with slightly different numbers...
For every $100,000 dollars in pay and benefits a city employee receives $43,000 comes from sales tax. If the city is receiving 1% (actually 0.95%) of each dollar in retail sales then it takes $4.3 million in sales to pay the sales tax component of each $100,000 spent.
Proponents of a "local only" economy (not you, but others are proposing this) need to explain how 100,000 Chicoans can produce the goods necessary to achieve the revenue required to pay for city services. It's a pipe dream.
A local government supported only by local producers would be very small. Services would be very sparse. That's actually okay with me. But to support high wages for unionized city employees and at the same time oppose corporate sales tax producers is an uninformed place to be. You can't have one without the other.
Lon
Posted by: Lon at November 20, 2007 08:45 AM
Tempra,
Good for you. What does your business do, just in case any readers want to give you some money?
Lon
Posted by: Lon at November 20, 2007 08:47 AM
Thanks, Lon, for asking. I am a consultant mostly for non-profit organizations, and I provide funder research, grant proposal writing and submission, newsletter and other document design, donor appeals and direct mail writing and design, annual campaign planning, and other fundraising advice and services. For more, see www.tempraboard.com. So, if any of your readers work for, volunteer for, or know of a good cause that needs funding, pass along my information!
Posted by: Tempra at November 20, 2007 03:52 PM
Tempra,
I don't see any disc golf non-profits on your client list. Maybe we should talk.
Lon
Posted by: Lon at November 20, 2007 04:00 PM



