Santa Barbara County planners and elected officials over-estimated cannabis tax revenues. Retail sales are up in Ventura, and at their lowest point in Santa Barbara since 1990s. And we are headed for a recession.
These were some of the points made by Peter Rupert, the executive director of the Economic Forecast Project at UCSB, in the latest episode of Santa Barbara Talks with Josh Molina.
He talked about the decline in Santa Barbara retail jobs compared to Ventura County.
“Right now, retail is at the lowest level ever recorded since 1990,” Rupert said. “It sank during the great recession and again during the pandemic, but it has just never come back and it’s very, very strange,” he said.
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He said Ventura and San Luis Obispo retail job numbers have declined, but are still greater than in 1990.
“Santa Barbara just fell off the map,” Rupert said. “It’s crazy.”
Ventura and San Luis Obispo retail trends should look similar, he said, “but they don’t.”
“People say, well, it’s the internet,” Rupert said. “I think Ventura gets the internet too, don’t they?”
He said online shopping isn’t the explanation.
“The explanation has to be something else, maybe more structural about Santa Barbara,” Rupert said.
He wondered if stricter rules and regulations in permitting make a difference in Santa Barbara.
Rupert also talked about the decline in cannabis revenue and how county planners were overly optimistic in their budget projections.
“Most politicians are like, ‘that’s a really good thing to tax, let’s tax it,'” Rupert said. “In economic terms it’s called an elastic demand.”
He said there was a perception that no matter how much you tax cannabis, people would buy about the same amount.
“I think we misunderstood the substitutes that were available for cannabis,” Rupert said. “I think we have seen an explosion in the illegal market.”
Lowering the cost of cannabis, he said, could increase legal sales and help boost revenues.
In this podcast, Rupert also talks about how we are headed for a recession, labor and employment trends, and the state of housing and tourism.