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WE NEED TO REMAIN RESILIENT AND WORK TOGETHER IN THE MONTHS AHEAD Santa Cruz County supervisors unanimously approved a roughly $874 million annual budget Tuesday that cut about 50 vacant county jobs, reduced salaries up to 10% through furloughs, and drew millions of dollars from reserves. Property tax, sales tax, hotel tax, and cannabis business tax make up nearly 90% of the county’s revenue for discretionary spending in the general fund. According to county leaders, county revenues have shrunk in large part because sales tax and hotel tax revenue dropped during COVID-19 business closures in the spring. The full county budget and the Sheriff’s Office budget was adopted Tuesday with these changes. Meanwhile, the Santa Cruz City Council took action in a special budget session on Tuesday. COVID-19 related losses have contributed to a projected $6 million deficit for the coming year out of a roughly $280 million budget. “The pandemic hit has had a really devastating impact on our community as well as on the city finances,” said Santa Cruz City Manager Martin Bernal. “The budget picture has worsened, and it is really at a scale comparable to the Great Recession of 2009. So it’s longer-term and structural in nature", Bernal said. The city budget for 2020-21 is nearly $280 million. Bernal said they already has saved the city about $8 million with: • Freezes on new hires and new expenditures • An early retirement program for city employees • City employee furloughs that reduce short-term personnel costs by about 10% • Ongoing negotiations with city employee unions Management Partners, the consulting firm to review the city’s finances, identified 20 ideas that would save the city $29.2 million over two years. Among the ideas to raise revenue: • Raise the hotel tax to 14% • Raise the city sales tax to 0.75% • Raise parking meter fees in some areas • Raise fees and charges for public works and development services • Sell Skypark in Scotts Valley, which the city of Santa Cruz owns • Start a vacancy tax on commercial or residential properties, similar to Oakland Among the ideas to reduce expenses: • Reduce services by eliminating half of vacant city jobs • Halve $1.96 million in funding for homeless outreach and nonprofit groups • Reduce parks maintenance The budget subcommittee is due to make these recommendations to the city council in September. Meanwhile, look at what the stock market is doing to rally from its drop in March and April. Wall Street clawed back from the last of the historic, frenzied losses unleashed by the new coronavirus, as the S&P 500 closed at an all-time high Tuesday. The day’s move was a relatively mild one, nudging the index up 7.79 points, or 0.2%, to 3,389.78. That eclipses the S&P 500’s previous record closing high of 3,386.15, which was set Feb. 19, before the pandemic shut down businesses around the world and knocked economies into their worst recessions in decades. The S&P 500’s milestone caps a furious, 51.5% rally that began in late March. The index, which is the benchmark for many stock funds at the heart of 401(k) plans, is now up nearly 5% for the year. The amount of aid from the Federal Reserve and Congress helped launch the rally, which built higher on signs of budding growth in the economy. More recently, corporate profit reports that weren’t as bad as expected have helped boost stock prices. These reports show a dramatic shift in our national economy compared to what is happening in California and along the Central Coast. The states rolling back or pausing their reopening is principally contributing to the duration of elevated unemployment in the nation today. It has also resulted in a flattening of consumer spending growth from mid-June through August 2. While economic conditions are improving, the labor market being restored to pre-pandemic levels is going to lag many other indicators for the remainder of this year, and very likely next year, according to the California Forecast report. You can read the report here: https://californiaforecast.com/covid-19-economic-analysis/ Now, let’s add in the recent lightning and thunder storms, high winds and wildfires surrounding the central coast. From the Pandemic Pivot to evacuations, the unsettling reality impacting Santa Cruz County seemingly is unparalleled. What is the solution to all this insanity? In a word that Santa Cruz County is famous for recovering from natural disasters, floods, fires, draughts and now the pandemic; Resilience can help us get through and overcome hardship. But resilience is not something we’re born with—it’s built over time, as the experiences we have, interact with our unique, individual genetic makeup. That’s why we all respond to stress and adversity—like that from the COVID-19 pandemic—differently. Here is an excellent article about how to stay in balance during challenging times: https://developingchild.harvard.edu/resources/how-to-help-families-and-staff-build-resilience-during-the-covid-19-outbreak/ I am certain, that as public sectors focus on their bottom lines, that local businesses must do the same. The Economic Recovery Council (ERC) was convened in early May to work with the County’s Public Health Officer where the primary focus has been the health, safety and well-being of our community — our people. The ERC is in discussions to re-purpose the Council’s mission and strategy going forward. Stay tuned and your Chamber will keep you abreast of those details. Last week, we were removed from the State’s watch list and must retain the metrics for the next week (14 days from last Friday, August 14) to re-open some businesses. The confusion relies on legal interpretation. You can read the county press advisory in this week’s eNews. Our continued focus for our members and the community is about helping business to business (B2B) and business to customer (B2C) survive and thrive with a path forward. There are no easy answers. Rather it is a firm commitment that resilience starts with each of us, from family to friends to your business associates, employees and customers. Take a look at this article that provides some thoughtful suggestions on where to begin (if you haven’t already taken some of these steps): https://www.pnc.com/insights/small-business/running-your-business/staying-resilient-in-covid-era.html Until next week, Be Calm and Stay Safe, and Buy Local.
WE NEED TO REMAIN RESILIENT AND WORK TOGETHER IN THE MONTHS AHEAD
Santa Cruz County supervisors unanimously approved a roughly $874 million annual budget Tuesday that cut about 50 vacant county jobs, reduced salaries up to 10% through furloughs, and drew millions of dollars from reserves.
Property tax, sales tax, hotel tax, and cannabis business tax make up nearly 90% of the county’s revenue for discretionary spending in the general fund. According to county leaders, county revenues have shrunk in large part because sales tax and hotel tax revenue dropped during COVID-19 business closures in the spring. The full county budget and the Sheriff’s Office budget was adopted Tuesday with these changes.
Meanwhile, the Santa Cruz City Council took action in a special budget session on Tuesday. COVID-19 related losses have contributed to a projected $6 million deficit for the coming year out of a roughly $280 million budget.
“The pandemic hit has had a really devastating impact on our community as well as on the city finances,” said Santa Cruz City Manager Martin Bernal. “The budget picture has worsened, and it is really at a scale comparable to the Great Recession of 2009. So it’s longer-term and structural in nature", Bernal said.
The city budget for 2020-21 is nearly $280 million. Bernal said they already has saved the city about $8 million with: • Freezes on new hires and new expenditures • An early retirement program for city employees • City employee furloughs that reduce short-term personnel costs by about 10% • Ongoing negotiations with city employee unions
Management Partners, the consulting firm to review the city’s finances, identified 20 ideas that would save the city $29.2 million over two years. Among the ideas to raise revenue: • Raise the hotel tax to 14% • Raise the city sales tax to 0.75% • Raise parking meter fees in some areas • Raise fees and charges for public works and development services • Sell Skypark in Scotts Valley, which the city of Santa Cruz owns • Start a vacancy tax on commercial or residential properties, similar to Oakland Among the ideas to reduce expenses: • Reduce services by eliminating half of vacant city jobs • Halve $1.96 million in funding for homeless outreach and nonprofit groups • Reduce parks maintenance
The budget subcommittee is due to make these recommendations to the city council in September. Meanwhile, look at what the stock market is doing to rally from its drop in March and April.
Wall Street clawed back from the last of the historic, frenzied losses unleashed by the new coronavirus, as the S&P 500 closed at an all-time high Tuesday. The day’s move was a relatively mild one, nudging the index up 7.79 points, or 0.2%, to 3,389.78. That eclipses the S&P 500’s previous record closing high of 3,386.15, which was set Feb. 19, before the pandemic shut down businesses around the world and knocked economies into their worst recessions in decades. The S&P 500’s milestone caps a furious, 51.5% rally that began in late March. The index, which is the benchmark for many stock funds at the heart of 401(k) plans, is now up nearly 5% for the year. The amount of aid from the Federal Reserve and Congress helped launch the rally, which built higher on signs of budding growth in the economy. More recently, corporate profit reports that weren’t as bad as expected have helped boost stock prices. These reports show a dramatic shift in our national economy compared to what is happening in California and along the Central Coast. The states rolling back or pausing their reopening is principally contributing to the duration of elevated unemployment in the nation today. It has also resulted in a flattening of consumer spending growth from mid-June through August 2. While economic conditions are improving, the labor market being restored to pre-pandemic levels is going to lag many other indicators for the remainder of this year, and very likely next year, according to the California Forecast report. You can read the report here: https://californiaforecast.com/covid-19-economic-analysis/ Now, let’s add in the recent lightning and thunder storms, high winds and wildfires surrounding the central coast. From the Pandemic Pivot to evacuations, the unsettling reality impacting Santa Cruz County seemingly is unparalleled. What is the solution to all this insanity? In a word that Santa Cruz County is famous for recovering from natural disasters, floods, fires, draughts and now the pandemic; Resilience can help us get through and overcome hardship. But resilience is not something we’re born with—it’s built over time, as the experiences we have, interact with our unique, individual genetic makeup. That’s why we all respond to stress and adversity—like that from the COVID-19 pandemic—differently. Here is an excellent article about how to stay in balance during challenging times: https://developingchild.harvard.edu/resources/how-to-help-families-and-staff-build-resilience-during-the-covid-19-outbreak/ I am certain, that as public sectors focus on their bottom lines, that local businesses must do the same. The Economic Recovery Council (ERC) was convened in early May to work with the County’s Public Health Officer where the primary focus has been the health, safety and well-being of our community — our people. The ERC is in discussions to re-purpose the Council’s mission and strategy going forward. Stay tuned and your Chamber will keep you abreast of those details.
Last week, we were removed from the State’s watch list and must retain the metrics for the next week (14 days from last Friday, August 14) to re-open some businesses. The confusion relies on legal interpretation. You can read the county press advisory in this week’s eNews.
Our continued focus for our members and the community is about helping business to business (B2B) and business to customer (B2C) survive and thrive with a path forward. There are no easy answers. Rather it is a firm commitment that resilience starts with each of us, from family to friends to your business associates, employees and customers. Take a look at this article that provides some thoughtful suggestions on where to begin (if you haven’t already taken some of these steps): https://www.pnc.com/insights/small-business/running-your-business/staying-resilient-in-covid-era.html
Until next week, Be Calm and Stay Safe, and Buy Local.