As a mayor and a businessman who cares deeply about his city and county, I am concerned about our economic situation. On a state and national level it is bad, but on the local level, where we can really feel and see it, it is even worse.
I gauge my opinion on the fact that our latest unemployment rates have improved slightly, but it is still nothing to brag about; not when they are still at double digits. Our latest numbers, as reported by the Santa Maria Times, for Santa Maria, Guadalupe, and Lompoc are 12.9 percent, 14.1 percent, and 14.6 percent, respectively. Any way you look at these numbers, they are still staggering. We need to bring them down to the mid-single digits for the benefit of our cities and our residents.
Not only are the unemployment numbers nothing to be proud of, but all cities along with Santa Barbara County are scrambling for adequate monies to support police, fire, recreation, libraries, etc. This financial shortfall is not just for this year, but is projected for many years to come.
This problem is further compounded by a constant “stealing” of local dollars by the state of California because that is the only way it knows how to plug the holes in its sinking ship of a budget. It seems as if our state legislators have forgotten that many of them first started in local government. They know firsthand that any monies they take from the cities hurts the citizenry they formally represented at a local level, yet they still do it. As a representative voted in by my community to be a steward of my city’s dollars, it is very frustrating to try to balance a budget this way. Just recently, the state stole half a million dollars from Guadalupe! In all, the state took a total of $2 billion from California cities.
My frustration has forced me to think outside of the box to create a viable solution—a solution that is not only for Guadalupe, but quite possibly for any city or county that wants to stimulate its local economy and start steering toward a more sound financial footing. My proposal is straightforward because it applies a simple theory intended to encourage business development and growth. Small businesses are the backbone of our nation’s economy. By providing sound incentives that are designed to encourage growth and stimulate jobs, we can start working our way back out of this recession.
I propose an incentive program intended to reward small business owners for creating local jobs by rebating a portion of their building permit fees or tenant improvement permit fees. The amount of the rebate would be dependent on the number of long-term fulltime jobs they create; the more jobs they create, the greater the rebate. The qualification criteria would be simple. A business owner could apply for a rebate of their permitting fees after one year. The rebate percentage would be based on the number of fulltime employees permanently hired and retained for at least one year, from 5 percent for one or two employees, up to 50 percent for more than 20.
A critic of this solution might be concerned about the loss of funds through the rebates, but that is being small minded. If you consider the overall impact it will have, it is clearly a solution that works. Not only would the small business owner be able to use that rebate in growing his or her business, but our cities and our county would benefit from each new person gainfully employed because they would be able to spend those earned dollars locally on purchases for themselves and their families. Over the long term, the sales tax and property tax they generate would more than offset any rebate that was given and ultimately put money back into the public services needed by the deserving citizens of our communities. In addition, the program would sunset once it accomplished its intended purpose of reducing the current unemployment rate by half. For Guadalupe, that number would be an unemployment average of 7 percent for a year.
Please keep in mind that the numbers I proposed have been tailored for the city of Guadalupe, but they can be easily modified to meet the needs of any city or county. The point is, it is time to encourage our local businesses to create local jobs … now.
Lupe Alvarez is mayor of Guadalupe. Send comments to the executive editor at rmiller@santamariasun.com.
This article appears in Jul 8-15, 2010.