For decades, State Street has been the beating heart of Santa Barbara — a vibrant corridor where locals and tourists alike gathered to shop, dine and experience the unique character of one of the world’s most beautiful cities.

But since State Street was closed to automobile traffic during the COVID-19 pandemic in 2020, our beloved downtown has suffered a slow-motion unraveling.

The consequences for our local economy and civic life have been devastating, from declining business to the loss of cherished traditions like parades on State Street.

The latest sales tax data confirm what residents and business owners have felt for years. As Noozhawk reported Sept. 2, the City of Santa Barbara’s sales tax revenue for fiscal year 2024-2025 fell to $29.3 million — an alarming 6.1% ($1.9 million) below projections and a year-over-year decline of 6.0%.

This places Santa Barbara as the second-worst performer among California cities of similar size, behind only Upland and tied with Perris.

While the statewide average decline is just -0.3%, and Bay Area cities like Mountain View and Palo Alto are posting robust gains thanks to e-commerce and tech, Santa Barbara’s economic engine is sputtering.

Let’s not forget: a full 25% of city revenue comes from sales tax and the transient-occupancy tax.

It is a dire sign when Santa Barbara finds itself compared to the Inland Empire.

This is not just a statistical blip. Unlike Upland and Perris, which face macroeconomic headwinds in the auto and logistics sectors, Santa Barbara’s economy is built on retail, tourism, education and the unique charm of our downtown.

The persistent and short-sighted closure of State Street to vehicles has severed the vital connection between residents, visitors and local businesses.

The results are undeniable: shuttered storefronts, rising vacancy rates, declining foot traffic, and a downtown experience that no longer draws the crowds — or the revenue — it once did.

In the last quarter alone, Santa Barbara’s sales tax revenue was 8.4% below budget. Even the recent Measure I tax increase, which provided a short-term buffer, could not offset the deeper structural decline.

State Street’s closure was meant to create a pedestrian paradise, but the reality is far from idyllic. Instead, we have a corridor that is dirty, degraded and increasingly unsafe.

E-bikes and scooters zip through crowds of pedestrians, creating hazards for families and seniors. Makeshift parklets — many poorly maintained and visually unappealing — have taken over the street, undermining the very experience they were supposed to enhance.

The result is a downtown that is less welcoming, less vibrant and less safe.

Lesson from Ventura

Santa Barbara is not alone in facing these challenges. Just down the coast, Ventura recently grappled with a similar experiment.

Like State Street, Ventura’s Main Street was closed to vehicles in 2020 to support social distancing and outdoor commerce during the pandemic.

But as time passed, the city faced mounting concerns from business and property owners about lost revenue, rising vacancies and a decline in the area’s economic vitality.

Ventura’s effort to make the closure permanent failed after a majority of affected downtown property owners — citing more than $230 million in losses, according to the Ventura County Star — formally objected.

The City Council voted unanimously to terminate the pedestrian mall initiative, acknowledging that the objections accounted for 56% of buildings in the closed area.

Vacancy rates soared from 5% to 20% since Main Street’s closure.

As one business owner warned, “We won’t have a downtown left if it continues this way because as business owners and property owners we have seen the change, and it is dramatic.”

The City of Ventura now faces two lawsuits from business owners demanding compensation for the damages caused by the closure.

It is a public relations disaster — and a branding nightmare — to see businesses and property owners suing the very city they have always supported.

With its dwindling reserves, self-insured status and deficit spending, Santa Barbara should be very careful — and very worried — about the likely prospect of litigation.

Ventura’s experience is a cautionary tale. Even city leaders who supported the pedestrian mall recognized the need to “take care of our business owners and property owners in order for us to have a vital downtown.”

The lesson is clear: ignoring the economic realities faced by those who invest in and sustain our downtowns can have dire consequences — both financially and legally.

Retailers have told local commercial brokers that they will not invest in a closed street. It is time to reopen State Street and begin solving the many other problems the city faces.

Why We Care

The Santa Barbara County Taxpayers Association has been a steadfast advocate for responsible, transparent and effective government since its founding in 1956.

Our mission is to promote fiscal responsibility, protect taxpayers’ interests and ensure that public funds are spent wisely to benefit all residents of Santa Barbara County.

Over the decades, we have championed policies that foster economic growth, accountability and the highest quality of life for our community.

We are not anti-progress, nor are we opposed to innovation in urban planning. But the current closure of State Street is a textbook example of a policy that, while well-intentioned, has produced results contrary to the public good.

As an association, we advocate for reopening State Street as part of a larger, evidence-based plan to jump-start our city’s economy, restore vital tax revenues, and ensure we can continue to pay for the services — public safety, parks, infrastructure, education and more — that make Santa Barbara such a special place to call home.

A Path Forward

Ventura’s reversal should serve as a wake-up call for Santa Barbara. We must learn from their experience and from our own declining sales tax numbers.

It’s time to acknowledge what so many residents and business owners already know: State Street should be reopened to vehicle traffic.

This is not a call to abandon our commitment to walkability, sustainability or public space. Rather, it is a recognition that a thriving downtown requires balance — between cars and pedestrians, commerce and community, innovation and tradition.

Santa Barbara deserves to be at the top of the list for prosperity, not economic decline. Let’s learn from the data, listen to our business community, and make the bold decision to reopen State Street.

Our city’s future depends on it.