Thursday, July 22, 2010

Shop Ventura

Everybody should buy local. It's good for local businesses, it increases local tax revenue, and it makes people feel good about their community. Here in Ventura, we're working on putting together a comprehensive "buy local" campaign. There are many buy local campaigns already in place, and we're working with them, with the Chamber of Commerce, the Downtown Ventura Organization, and other groups. But there are many approaches to "buy local," and we want to make sure we get it right.

During the current recession, there's been a revival of "buy local" campaigns all over the country, especially as sales of big-ticket, big-tax items such as automobiles have been on the decline. Some cities have simply tried to raise awareness. If you shop in the next town, you're paying the salaries of their police officers, not ours. Others have taken more aggressive steps, giving gift cards or rebates for local car purchases. Yet there's one common theme: As retail sales has gone into steep decline in the last few years, jurisdictions nationwide have realized that they can't take sales tax for granted.

For the past 30 years, the favored approach of California cities to pursuing more sales tax has been to attract more retailers--often with deep subsidies. In some cases, property tax increment financing was used to subsidize auto dealerships and shopping malls, with the hope of generating a sales-tax payoff. In other cases, cities simply split the sales tax increases with the retailers.

The recent recession has rendered these models outdated, at least for the moment. No increment in property taxes has occurred because property values have been falling, and there has been no increase in sales tax to share.

Nevertheless, some localities continue to subsidize their big retailers to keep them afloat. In May, the Long Beach, Calif., City Council approved a loan to legendary Ford dealer Cal Worthington of $600,000 to keep him going--and stay in town. Other cities may face similarly difficult choices as the auto manufacturing industry contracts.

Other localities have taken a different but equally aggressive approach. Some cities have simply set aside a slug of money to give rebates to people who buy-in their town-big-ticket items like cars. Others have worked with their retailers to offer gift cards: Buy a car, get a gift card worth several hundred dollars for other retailers in town.

In general, these buy local campaigns--or as one wag has called them, "bribe local" campaigns--have had the same effect as the Obama administration's Cash For Clunkers program: A brief boom in sales, followed by a crash back to previous levels when the program ended.

Here in Ventura, we have come to realize that a buy local campaign that's truly effective is a sustained effort, not one based on gimmicks. This is hard to calibrate with retail thinking, since retailers are always focused, understandably, on the short term and often use gimmicks to boost sales. But all the evidence points to the idea that people will stop leaving town to buy things when two things happen: first, when the stuff they want to buy is available in their town; and second, when they realize that there's a relationship between where they buy stuff and how many police officers and firefighters their city can afford.

With the current retail market in flux, it's a little hard to know just exactly what stuff people are going to want to buy in the future (will they be buying cars or not). Therefore it is hard to know which retailers to go after. But the other half of it is easy: Rather than using short-term gimmicks, cities should use long-term public education efforts to ensure that their residents know where their sales tax dollars go--even when it means pointing to another city.

If you're interested in helping us with our buy local campaign, please contact Eric Wallner at

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