George Rebane
Well, economic development planning season is upon us again. Meetings and workshops are coming down the pike in a regular procession with the next being ERC’s breakfast get together on 6 March at the Holiday Inn. A small group of us met last week with ERC’s CEO Gil Mathew to discuss various approaches to economic planning which I hope Gil will incorporate into a framework that will organize the 6 March meeting into something productive. In this piece I will summarize a takeaway from the several meetings I have recently attended and conversations with various people on the matter. Even though some may share some of these thoughts, ultimately I take responsibility for any of the remaining orphans, setting them all down, and doing my best to defend or mend them in response to reasonable criticism. As you will see, almost all of these points are difficult for elected leaders, public officials and employees to consider in open forums. In any event here they are to be discussed and/or dismissed, but hopefully, not overlooked.
First, the easy part of adopting a reasonable approach to planning -
1. Adopt a Measurable Objective of Economic Development. Planning a program of economic development is akin to designing a system to do something. Economic development of a region can take many forms that are not equally acceptable to all concerned. To insure that we’re all singing off the same sheet, the first task in an Economic Development Plan (EDP) should be a clear statement of what type of economic development is sought for the county and what is its quantitative metric (consisting of direct and proxy measurables) so that alternative approaches can be productively debated, evaluated, and progress measured. For example, the weighted sum of taxes that stay in the county and net taxes that are exported (net import of state/fed monies is a negative contribution). Not all dimensions of economic growth can be achieved with limited resources. We need to select and target the minimum achievable factors of economic growth. Without such a beginning, the enterprise will become another political game in which serious people who know how to create wealth will not want to participate. This leaves the field to the cacophonous no-growth activists.
2. Identify Available Resources to Support ED. List which agencies, institutions, commercial interests, and government departments can be expected to provide what kinds of resources for enabling the adopted EDP.
3. Identify Real and Perceived Constraints on ED. List the major factors relevant to Nevada County that will limit or impede the adoption of alternative approaches to ED. These should include ‘holy cows’ - such certain aspects of the current General Plan and general statements such as ‘no smokestack industries’ or ‘minimize large lot housing units’ or ‘minimize households with a large number of school age children’ or ‘maintain population growth under 2% per year’ or ‘expand the tax base from the current types of contributors’.
Adding to the above systematic and rational approach to EDP, we now get to the sticky part. The following baker’s dozen of propositions could be adopted as postulates or likely truths to inform and guide the plan development. Or through reasoned argument, better (more true AND less controversial) ones substituted.
1. Avoid Adopting a ‘Balanced Community’ Target. Instead discriminate in favor of residents that import or generate wealth. Extremely few people consider community balance as a factor affecting their decision to relocate. Very few younger people expect their next move to be their last move – the more skilled/educated they are, the more times they will move during their productive lives. Each individual/family has a specific set of personal requirements that reflect their own wants and proclivities at that time. – it is these factors, not broad demographics that attract the residents we want. For an EDP to attract such inflows an ED metric may include the attribute of net per capita tax dollars exported from the county.
2. All manufacturing firms will leave within ten years. Consolidation, cost reduction, and low labor costs will drive them toward more densely populated transportation centers or overseas.
3. The Retired are by far the county’s largest source of net revenues, support of local merchants, the cultural component, and smallest draw on services. The entertainment and enrichment resources that these folks (over 20,000) require serve double duty since they are the same as those promoting tourism.
4. Nevada County land is its enduring and valuable asset. Once its monetary value is destroyed, there will be no resources within any conceivable planning horizon to restore this asset.
5. We should prepare for three broad categories of ‘industries’ – information intensive companies, people services (retail, government, schools, healthcare, maintenance, …), and the leisure/retired. Success in attracting all of these will hinge on many factors, among the most compelling factors is availability of wide-area, broadband connectivity of various and evolving flavors without which NO economic development will be possible.
6. Information intensive firms will consist of development and information/data service activities. These will employ well-educated, well-paid people. Companies seeking to re-locate here will not demand a local resupply of educated, skilled labor. Our country along with most of the world already has a large and very mobile population of skilled labor. The draw for these people is career promoting wages and an agreeable/inviting living environment. Provide these and they will come.
7. People Services, Activities, and Enterprises. Except for government services (including public schools), the marketplace will provide the necessaries for those who come here to import and generate wealth. Government’s prime function here should be to regulate such activities and enterprises only to the extent that the desirable mix in the population growth rate is maintained – e.g. say, add two wealth generator/importer housing units for every one housing unit providing services. To the extent that we exceed such a ratio, we become a bedroom community to those providing services along the I-80 corridor.
8. The Leisure/Retired ‘Industry’. Nevada County real estate is expensive, and with care its value appreciation will continue. Continuing to attract the leisure and retired population broadens the county’s per capita tax base and decreases the government’s per capita service costs. The leisure/retired people import cash into the county through investments and transfer payments, cash that does not require any local facilities, supporting utilities, schools, etc to generate. These people pay with cash for every marginal service or amenity they consume, thereby creating local jobs that further increase tax revenues. They are the ‘greenest industry’ we can have and should be viewed that way. And if in the future we change our mind, these folks are easy to manage and get rid of – just make life harder for them, and first they quit coming, then those already here leave.
9. Promote commuting to Nevada County, discourage commuting from Nevada County. We don’t want to become a bedroom community for distant work places.
10. The more facile – safe, speedy – we make our highways to the ‘outside’, the greater will be the pressure for population growth, especially lower-wage, high number per household population. Somewhere here is a trade-off.
11. Maximize Privatization of Government Functions/Services. Not all things government does can nor should be privatized. But privatization done right has saved taxpayers across the land lots of money and improved services. Our local governments should assign a senior level staffer the job of ‘Privatization Czar’ – perhaps the city and county governments could initially share the cost of one such staffer. This person’s job would be to continually survey the things that local government does and identify those which could be privatized. When such a function is identified s/he would seek approval from policy makers, write the comprehensive RFP, distribute it to qualifying bidders, and manage the adjudication of the bids. The czar would then negotiate the contracts and support their management. Again, done right, such a dedicated function could pay for itself many times over. We must always keep in mind that the government employee is the usually the most expensive person to do the job.
12. Local schools (including Sierra College) will be necessary and convenient for local school age students, adults learning trade skills, and cultural enrichment or fulfillment. In the aggregate, local schools will prepare our young people to leave the county as they continue their schooling and/or reach elsewhere for the starting rungs of the economic ladder. Local schools will be a factor in inducing information technology companies to move here only to the extent that they satisfy the schooling demands of their employee parents. These companies will bring/attract their own employees from other labor markets and induce them to live here because of the natural beauty, recreation, and attractive small community factors. These employees of IT companies will not require low cost housing – most certainly not government enforced ‘affordable housing’ – beyond what a free housing market will supply.
13. Tourism is good. We are within three hours driving time from over fifteen million Californians. Tourists wandering up and down our main streets visiting our shops and eateries, attending our parades, street fairs, and special arts events add a charm to the community and confirm that we live in a special place. They import dollars into both the private and public sectors. We should include a strong element in the EDP to promote Nevada County tourism. We should also consider extending NC’s tourism pull through adding an event that would grow over the years and bring in a class of low-maintenance, well-behaved tourists with money to spend. An idea that comes to mind is an annual four-day ‘Gold Country Jazz and Wine Festival’ that would fill our hospitality industry to capacity featuring local and national artists playing at the numerous venues available in the GVNC area. It would start small and grow.
To pull these points together under one umbrella development strategy, that will be evaluated on the basis of merit (or its lack) and not dismissed out of hand, will be difficult. Each faction of our community is so used to doing only ‘hip level processing’ on ideas coming from the other side, that we automatically skip the content and attack the carrier, it’s much more fun that way and no one needs to expose their (in)ability to noodle about new things. But here goes anyway.
The overall strategy that integrates the above points is one in which we will seek to maintain our environment and quality of life by recognizing we sit on a scarce commodity that will naturally appreciate with the passage of time if we let it. Our choices for the future are very few, and a middle-class, balanced community is not one of them. There is no way to get there in its design or execution – as the song says, ke sera sera. Instead, we can either acknowledge the value of where we live, and allow market price levels to reflect that value, or attempt to manage artificial price levels by government fiat. Market price levels will naturally act as a barrier to high-density, environment-destroying populations – yes, prices do discriminate. In allowing this path, Nevada County will continue to be populated by people who live here because they want to and can, not because they have to or are here as wards of the state. By attempting to socially engineer any of the more restrictive alternatives, we will take Nevada County on the sure path to a Roseville future or worse.
The no/slow-growth activists will, of course, be outraged by these limited choices. They will continue shouting politically correct platitudes about things ‘smart’ and ‘green’ and ‘inclusive’, and go on with the same old scheme of attempting to erect barriers to growth that savvy developers with high-paid lawyers will overturn in the courts. And this result is assured because the activists’ agenda continues to violate basic property rights, and freedoms guaranteed in our federal and state constitutions. For those who think that a future, more left-leaning state legislature will make their dreams of a Mayberry come true - dreams where we sell each other home-grown vegetables and buy each others’ beaded vests - think again, there is no free lunch.
Somewhere along the line we have to either import or generate cash, since in Nevada County we can’t print it. And the bankrupt solution of the collectivists requires that some folks in Ohio or even Los Angeles can be over-taxed enough to pay our bills. This isn’t going to happen because, as Garrett Hardin showed us almost fifty years ago in the ‘Tragedy of the Commons’, every community will want a piece of the same pie until they discover that there is no one left to make the pie. Acquiescing to a collectivist strategy or going forward with no strategy at all will guarantee that Nevada County will become the San Fernando Valley del Norte of the foothills. That’s how communities blanketed with ticky-tacky houses were born. We can do better.
======= 3mar08 addendum
Transportation Commissioner and ERC board member Russ Steele on NC Media Watch has some important thoughts on transportation and economic development.
#1A is right on the mark; if we don't adopt a measurable objective any programs are worthless. I agree with the majority of the points listed in part b. Particularly, #2b and #13b struck a chord with me. I would only dis-agree with #9. I hope our "leaders" are reading.
Posted by: Overtaxed and Unheard | 02 March 2008 at 08:33 PM
George,
I have posted some thoughts on economic development on NC Media Watch. It started as a comment here and grew too long. Please see my comments at NC Media Watch.
Posted by: Russ | 02 March 2008 at 09:21 PM
We just got EV via Verizon yesterday from the Oregon House peak tower, line of sight, three miles away. Good start.
If the land is what counts, then keeping trees on the land counts for a lot. more support for the fire depts and brush suppression measures.
Telling our youngsters they can't live here until they've built up a pile and become middle-aged does not boost morale in the schools. You might want to factor that in....and do something about it, if you want future techies of quality who don't speak Hindu or Chinese.
Posted by: Douglas Keachie | 08 March 2008 at 01:02 AM