The Town Council hereby adopts the non-binding Economic Development Incentives Policy Statement, attached hereto as Exhibit A and incorporated herein by this reference (the “Policy”), in furtherance of its goals to encourage economic vitality and diversity and the creation and retention of jobs that pay at or above a livable wage, and to help attract and retain primary job employers within the Town and County…
— from Resolution 2019-15, ‘A RESOLUTION OF THE TOWN OF PAGOSA SPRINGS, COLORADO ADOPTING ECONOMIC DEVELOPMENT INCENTIVES POLICY STATEMENT’
During the discussions at last night’s Pagosa Springs Town Council meeting, about Resolution 2019-15, Council member David Schanzenbaker expressed some concern about the ‘Economic Incentives Policy Statement.’ That policy statement had already been approved by the Archuleta Board of County Commissioners (BOCC) on Tuesday.
Mr. Schanzenbaker:
“I see in the Resolution, it says that we are trying to encourage primary job employers within the Town and County. But I don’t see any language within the actual Incentives Policy that this is directed toward primary jobs.”
Mr. Schanzenbaker is correct, in a sense. The ‘Economic Incentives Policy Statement’ approved by the BOCC, and which was going to be approved by the Town Council within the next couple of minutes, does mention the term ‘primary job employers’ — but the actual incentives offered make no distinction between primary jobs and any other kind of job. You can download the Council Resolution and the (conflicting?) ‘Economic Incentives Policy Statement’ here.
Town Manager Andrea Phillips responded by suggesting that the Town Council would, in the future, give more weight to incentive applications coming from ‘primary job employers’ and perhaps not offer incentives if the proposed business doesn’t qualify?
We’ll pause here for a moment and clarify the term ‘primary job employers.’ If you search for the term ‘primary jobs’ in Google, you might find an explanation like this:
Primary jobs involve getting raw materials from the natural environment e.g. Mining, farming and fishing. Secondary jobs involve making things (manufacturing) e.g. making cars and steel. Tertiary jobs involve providing a service e.g. teaching and nursing…
Or you might find job listings for teaching jobs in ‘primary schools’ in Great Britain.
But Resolution 2019-15 was obviously not referring to jobs in the mining, farming or fishing industry. Here are some definitions from the Montrose Economic Development Corporation website, based in Montrose, Colorado:
What is a Primary Employer?
Primary employer refers to industries that produce more goods and services than can be consumed by the local economy, and therefore export a significant portion of them. A major benefit of primary employers is that external funds are infused into the local economy, and therefore have a substantial impact on output, employment, and wages. A common primary employer is manufacturing.
Primary Job
A primary job is a job that produces goods and/or services for customers that are predominantly outside the community. This creates new “outside” dollars for the community. Once an employer is paid for the products and/or services, he redistributes that wealth in the community through wages paid to employees and through suppliers.
Secondary Employers
Secondary employers are those employers that serve the local community. Therefore, the goods and services produced are enough to serve a portion, or all, of the local community. Secondary employers play a significant role in the local economy by providing goods and services to residents and primary employers alike. Common secondary employers include retail and dining establishments, which cater primarily to a local consumer market, as well as construction and transportation. In addition, arts and cultural industries are typically secondary employers.
If you read the above description carefully, you might be confused (as I am) about where, exactly, the tourism industry fits into the economic incentive model?
Certainly, a hotel or a rafting company or a vacation rental gets its income “predominantly from outside the community.” And this generates “new outside dollars for the community.”
But in no sense of the word does the Pagosa Springs tourism industry pay ‘at or above a livable wage’ in a community experiencing a housing crisis. And that housing crisis has been caused, at least in part, by the Economic Incentives and Subsidies delivered by the BOCC and the Town Council over the past 25 years. As I mentioned previously in this article series, our local governments have spent at least $8.4 million on ‘economic development’ since 2006, with at least $6.9 million going into promoting tourism — the industry well known for paying less than livable wages in Colorado mountain towns.
But, like a opioid addict, local governments are generally looking for their next fix. When a government overextends itself — as both the Town and County governments have done, here in Archuleta County — the obvious ‘fix’ is to promote economic growth. Economic growth brings in more tax revenue. Doesn’t matter if the economic growth is ruining neighborhoods or paying less than livable wages. (Or maybe it does matter?)
It’s a hamster wheel. Once a government begins viewing ‘more growth and more tax revenues’ as the solution to excessive investment in infrastructure and equipment and staff salaries, there’s no turning back. There’s no feasible way to ‘grow your government’ without growing your tax revenues. So economic growth becomes a primary concern for a government that has overextended itself.
During her staff report at last night’s meeting, Town Manager Andrea Phillips noted that the Town Police Department continues to struggle with empty staff positions. That’s not a good sign, when a community cannot fully staff its law enforcement positions.
When I moved to Pagosa in 1993, it was pretty easy to find an affordable home, but it was not easy to find a job. My sense, from talking with long-time residents, suggests that a similar situation existed prior to 1993 — jobs have always been hard to come by. 25 years of economic development efforts by our local governments have turned the community upside down. In 2019, it’s difficult to find qualified employees to fill a job position, and it’s nearly impossible for that employee to find an affordable place to live.
Time to for our local governments to change their policies? We might think so. Unfortunately, the ‘Economic Incentives Policy Statement’ approved this week by the Town Council and BOCC is right out of the 1993 Playbook.