An Economic Review of Calaveras County

 By Susan Ashby for CCDCC

This paper reviews current economic factors in the County plus the State’s forecast for the next several years.  It will also discuss potential impact of certain events on the County.

United States’ Economy

Before looking at Calaveras information, let’s look at the state of the economy for the U.S.  The current economic expansion is the third-longest in U.S. history but it is the weakest economic recovery since World War II.

“Only two expansions have matched the lifespan of the one that began June 2009 and has endured for 96 months:  a 106-month expansion that ran from February, 1961 to December, 1969 when President Lyndon Johnson stoked growth with spending on domestic programs and the Vietnam war.  And a 120-month streak that began in March, 1991 and ended in March 2001, after the dotcom bubble burst.”

Employers have been hiring steadily since 2010 – “81 straight months – easily the longest streak on record.  And the number of Americans applying for first-time unemployment benefits has stayed below 300,000 for 125 straight weeks.  That’s the longest such streak since 1970, when the population and workforce were much smaller.”

However, compared with the other two long-lasting expansions, the current one looks weak.  A big reason is just how bleak the job picture was eight years ago.  The Great Recession wiped out 7.4 million jobs and the job market didn’t actually hit bottom until February 2010.”  “…over the last couple of years, we have definitely moved to a slower pace of job growth” says Robin Anderson, senior economist at Principal Global Investors.
AP Economics Writer Paul Wiseman

Nationally, the unemployment rate was 4.4% as of June, 2017. For California, 17600 new jobs were added in May, dropping the State’s unemployment rate to 4.7%.

Current Economy in Calaveras County

Employment

With a population just under 46,000 and a civilian force of a little over 21,000, the current unemployment rate is 5% –down from 6.1 in January, 2017, and 5.6 a year ago in June, 2016.  By comparison, for 2016, Amador County was 6.0 and Tuolumne 5.7.   Mariposa, Merced, Madera counties all have higher unemployment rates than Calaveras.

Tourism

“Calaveras …draws tourists from all over the globe to its cultural events and to treasure the small town ambiance. Because of its attraction to visitors, the tourism business is thriving, and it is one of the major growth industries in the County.”

Lisa Boulton, Executive Director, Calaveras County Visitors Bureau.

2016 preliminary data from the State shows $180 Million in total travel-related spending and 2340 jobs in Calaveras County.

There has been steady growth in visitor spending and travel-related employment since 1994.  The average annual change in visitor spending since 1994 is 3.3%; between 2015 and 2016, an increase of 3.0%.   With regard to employment, the average annual change in travel-generated employment from 1994 to 2016 is 1.0% and between 2015 and 2016 there was an increase of 2.0%.

Cannabis

In February, the University of the Pacific Business and Policy Research, Eberhardt School of Business, Stockton, and McGeorge School of Law, Sacramento, wrote “An Economic Impact Assessment of the Cannabis Cultivation Industry in Calaveras County.”  Key findings of direct impacts of 2016 Calaveras cannabis cultivation include:

• Sales value: $251.5 million
• Direct employment: 2605
• Direct labor income: $148.4 million.

Cannabis cultivation equates to about 15% of the county’s Gross Regional Product (GRP) and when indirect and induced impacts are included, the total impacts are about 19% of GRP and 21 percent of the county’s jobs.
http://www.calaverasenterprise.com/news/article_ae6a1436-fa00-11e6-a2cc-2f322e7c7034.html

Other Farm Commodities in 2016

Cattle and calves – $9.3 million; Poultry $52M; Wine Grapes $2.7M; Walnuts $2.2M; Timber $1.7M; Sheep, Vegetables, Apiary, Nursery, and Misc. Livestock $886,000.
http://ema.co.calaveras.ca.us/Portals/EMA/Documents/Ag/ProdReports/2015_Crop_Report.pdf

Forecast 2016-2021

Per the State’s forecast:

• Population growth will be flat, with the county neither gaining nor losing a substantial number of residents.
• Job growth will average 0.3 percent per year.
• The largest job gains will be observed in wholesale and retail trade, as well as leisure and hospitality. Combined, these industries will account for 77% of net job creation in the county. http://www.labormarketinfo.edd.ca.gov/county/calaver.html

The above forecast would change drastically and in a positive direction if cannabis cultivation were to be approved in this County.

2017-2018 County Budget

The county really doesn’t generate enough revenue to pay for its basic needs including some things that are important to a healthy, thriving community. The preliminary budget, recently passed by the Board of Supervisors, reflects a deficit of $3.3 million.  This amount will have to be resolved, by finding revenue and/or cutting costs, by September, 2017.

Events that could impact our economy in the near future

• Cannabis:  Legalizing cannabis cultivation would clearly impact the County positively.  If cannabis is banned, the GRP and job figures will suffer significantly.  If 19% of the GRP for 2016 was due to cannabis and the 2017-2018 preliminary budget is negative $3million, what is going to happen if cannabis is banned?
• Tourism:  This past winter brought a lot of snow and water for winter and summer recreation.  But it also brought road closures that were not opened until late June which may show up as a negative impact on the 2017 tourism figures.  Future winters, ones with damaging storms or of drought will always impact the tourism industry here.  If the biggest industry, other than cannabis, is tourism, than we should take all the necessary steps to support it.
• High-tech:  Another item that might have a positive impact on the economy of the County, but for which there is no economic estimate, is bringing a high-tech venture into the county.  However, that is difficult because what companies look for in a community are the very things we lack:  hi-tech labor force, hi-speed broadband,  parks, recreation, culture.

If the county had more money, what could we do with it?

It depends on who you ask.  Here are a couple of examples:

• Law & Safety:  The DA might like a victim’s advocate.  The Sheriff’s department might want increased salaries and/or more staff, although these would mean bigger retirement liability.  Plus they might want a fully-staffed jail.
• Health & Social Services:  Calaveras has no substance abuse treatment, no narcotic detox, no family planning services, no emergency domestic violence shelter, no 24- hour care for mentally ill, no parks and recreation department.  Also, things like an education program about drugs and alcohol could be initiated.
• Infrastructure: Investment in clearing the soil of arsenic from old mining operations.
• Tourism:  Improve the trail system and public roads improvements; make improvements and advertise for more mountain bikers, campers, and water rapids riders.   Beautification of the Highway 4 corridor.   Regional parks.