Predictions about the economy are like weather forecasts, or scientists pinpointing when the Big One will hit California — interesting, but not the gospel.
Actually, weather forecasts have become more reliable because of the precision of orbiting weather satellites and computer modeling.
The same could be said, at least partially, about economic forecasting, minus the weather satellites.
Predicting what the future will bring to the economy is mostly guesswork, but that doesn’t stop experts from doing it.
There was a sizable turnout recently at Solvang’s Alisal Guest Ranch for the North Santa Barbara County Midyear Report, presented by the UCSB Economic Forecast Project. The featured guests were city managers from the four North County cities and a county government official.
What these experts had to say was mostly upbeat, with a few challenges facing specific regions, plus a blunt prediction from Economic Forecast Project Executive Director Peter Rupert.
The bottom line is that things look pretty good at the moment, but Rupert all but promises a recession is in our future. He wouldn’t be pinned down on exactly when such a downturn might occur, only that it will.
That makes sense. Historically, the economy at all levels is very gravity-specific, in that what goes up must come down. It is inevitable, and Rupert’s message at the Economic Forecast meeting was for municipal managers to prepare for the inevitable.
For the county overall, an assistant county CEO said to expect revenues from the unincorporated areas to remain stable. The legalization of marijuana growing and sales is the fiscal wildcard, a virtual unknown at this point, but that industry is expected to enhance county government’s bottom line.
The warning with regard to the cannabis industry is that at least some of the extra revenue may be drained by expanded law enforcement requirements. That’s still a work in progress.
The report on the two cities in mid-county, Solvang and Buellton, was positive — both cities are planning for the future, setting aside reserve funds and working to bolster their major strengths. In Solvang’s case the emphasis is on tourism. Buellton’s strong suit is location.
The lowdown on Lompoc’s economy is generally positive, in part because the county’s very first retail marijuana store has opened, which could attract other types of businesses. But like so many governments these days, there is that matter of the city’s unfunded pension liabilities.
Lompoc’s other big issues include retaining city employees and finding qualified replacements when workers go elsewhere, plus a sometimes-fluid political situation. In other words, not much different than most governments these days.
Things are really looking up in Santa Maria. New City Manager Jason Stilwell considers the city’s economy to be relatively healthy, making note of the fact that Santa Maria has the highest level of sales tax revenue in the county, and a relatively low unemployment rate.
Recent news that North County is outpacing South County in population growth underlines another of Santa Maria’s big issues — overcrowded housing due to a general and chronic shortage of affordable housing units, a situation that haunts this region.
One very bright spot is policy makers’ continuing efforts to rebrand the city’s image, the latest move being the downtown streetscape strategy, which has enormous potential to increase the sales tax revenue stream. A collateral benefit is that Santa Marians will soon feel better about going downtown to find entertainment and recreation.
All North County city officials seem to agree that the introduction of the marijuana industry is a potential game-changer. Only time will tell.