Don‘t Neglect the Financial system in 2018

As the New Year gets started, a lot of people are extremely happy with their IRA and 401(k) accounts. Indeed the stock market has been spectacular over the last few years and, especially, the last 12 months. If you own property in Boulder or anywhere along the Front Range, you‘ve also seen a big jump in the value of your real estate.

So I‘m not surprised that people are feeling good about their finances. What is surprising though is how quickly they seem to forget that what goes up often comes down just as fast. Remember how much fun 2007 was? Then of course came 2008. Ouch! How about 1999 when the dot com boom seemed like it would never end? Two years later the Dow had lost a third of its value and the NASDAQ was down 80 percent.

After the dot com bust, Boulder suddenly found itself with a surplus of empty commercial space. City revenues dropped sharply and city staff were forced to cut budgets for the first time in decades. It was during this time that City Manager Frank Bruno convinced city council that our local economy should not be ignored. He proposed an Economic Vitality program to support local business and promote a healthy economy for the future – in both good times and bad.

In the years since its creation, the EV program and related efforts by the city to nurture local businesses with flexible rebates, SBDC support, CVB funding and others have been hugely successful. They helped us weather the great recession of 2008-2009 much better than most cities across the country.

So as I read through the 2018 priorities of our city council members for discussion at their retreat next weekend, it struck me that there was almost no mention of supporting economic vitality. Yes the economy is booming right now and some in Boulder feel it is actually creating too much growth.

But as we saw in 2001 and 2008, nothing goes up forever and it would be wise for our city leaders to continue supporting a diverse and vibrant local business community. Future city revenues could depend on it. So regardless of whether they discuss them next weekend, I hope Council members will consider some important priorities this year.

One critical segment of our local economy that is showing weakness now is retail. Sales taxes in Boulder are flat and would actually be down sharply if you take marijuana out of the mix. The Downtown Boulder Partnership saw this trend last spring and we are working closely with the city‘s Community Vitality Department on a strategic plan to support local businesses downtown.

However, we could all benefit from a broader, citywide retail strategy. Areas of focus could include fostering startups, preventing retail “leakage” to nearby communities and reinvigorating tired shopping areas like Diagonal Plaza where the empty Sports Authority and Walmart stores are a big wasted opportunity.

Another critical segment of our local economy that often goes unappreciated is tourism. More than half of our downtown retail and restaurant sales come from visitors to Boulder. Without them, many of the shops and eateries that locals love would not exist. They come, they spend and they leave. However their sales taxes stay behind and pay for trails, parks and libraries for you and me that most tourists never use.

By allocating a portion of lodging and restaurant taxes to the Convention and Visitors Bureau, the city supports a strong tourism economy. They should continue to partner with and support the great work that the CVB does for our community.

I doubt if this column will change the agenda of the Council retreat next weekend. But I do hope that members keep in mind in 2018 the importance of a healthy economy to a vibrant community. What goes up always comes down and we should be prepared.



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