Comment to the Napa County Supervisor Hearing on Policy March 10, 2015

Honorable Supervisors:
Not that long ago, as recently perhaps as 20 years ago, the Napa Valley had a healthy infrastructure and a high quality of life.

The county and the cities balance their budgets each year, but as evidenced by their never ending need for revenue and the declining condition of the infrastructure and level of services, the fiscal model by which they address growth is heading in the wrong direction.

While we know what each tourist spends, we do not know what each tourist actually costs, and simple logic tells us that the current long-term equation is negative. It is imperative that we resolve this question because it lies at the heart of any future planning policy.

The overall underlying deficit has reached a point where, with the exception of the very few who are reaping the profits, people are not happy. We are in urgent need of employing fundamentally different models in assessing the comprehensive costs and effects of growth and assign an equitable responsibility for their recovery.

Here are some numbers which we cannot be proud of:

* According to the 2013 California Community Economic Development, 27% of Napa County residents live below the Self Sufficiency Standard (SSS) of $ 27,841 for a single person as do 43% of families with children.

According to the California Employment Development Division:

* The Manufacturing/Winery sector is our largest employer. Its median wages are around $ 35,000 per year, barely above the SSS for a single person but not enough to support a second person (SSS - 39,242). The bad news is that it is expected to grow by 10% over the next 5 years.

* The Accommodation/Food Service sector has the worst median wage record of around $ 22,000 per year - only 56% of the SSS for a single person. Worse yet, this is an even faster growing sector.
While the County has no jurisdiction for the associated development in the cities, it is the County which enables that growth by increasing winery related tourism.

* Other major sectors of our economy, such as Retail, Waste Management and Administrative Support, pay median wages of around $ 27,000 per year, only 70% of the SSS for a single person.

On the other hand, we do not have any data on the income distribution of the Napa valley economy and its trajectory over time; something which needs to be done. In a model of growth from which business owners and developers profit, it would be grossly inequitable to distribute the cost of growth - both in monetary as well is in quality of life terms - on to the general public, including the 27% and 43%, all the way to teachers, police and fire fighters.

We have reached an unsustainable point in our economy which is based on taxpayer support to supplement the shortfall in SSS with various programs for 27,000 employees. Even the cost of affordable housing, which will never be built to a level high enough to make a difference in commuting, is being charged at highly discounted in-lieu fees and therefore relies on tax-payer subsidies.

Because of the low wage environment and the lack of well paying jobs:

* A full 1/4 of jobs in the county are imported and 16% are exported. This means that 32,000 workers commute twice a day outside the county clogging Hwy 29 and the Silverado Trail, degrading everyone's quality of life.

Even worse, the projections are downright frightening:

If current policies continue, the low paying job sector will increase by 10% over the next 5 years and by 45% over the next 15 years. This is a path to a disastrous decline in the quality of life at every level and for every Napa county resident.

According to 2012 Napa Valley Register statistics, hotel rooms in the Napa Valley grew from 3,693 in 2002 to 5,232 in 2012, a 42% increase with 2,000 more in pending applications. These would add some 4,000 of the lowest paying jobs.

The combined cost of the increasingly intense use of the infrastructure and resources is astronomical. According to credible studies, this leads to an ever widening - not a narrowing - gap between revenues from fees, sales taxes, property taxes, TOT and actual costs.

Local governments are caught in a downward spiral having no choice but to grasp at any short-term revenue of the "Deficit Growth Model". As a result, we are piling the enormous and increasingly out of reach costs of growth on to the general public while the profits go to a handful of financial entities. This is not only a fiscally unsustainable model, it is also an unethical one.

Solutions will require workshops of the most diverse and brightest people in the county. The prospect of continuing current policies without systemic changes is frightening.

BY: George Caloyannidis, PhD
Professor Emeritus School of Architecture, University of Southern California
Calistoga, CA 94515