Vail Valley Voices: Economic reform needed in Vail?
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report for October. We publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town. The newsletter’s electronic version with links to supporting documents is avail?able at http://www.vailhomeowners.com.
Vail and the surrounding communities are being swept along in the rapidly changing currents of the economic times. There are glimmers that a new, more global perspective and energy efficient future may be taking hold. Opportunities abound in Vail and its suburban communities. However, local economic reforms are necessary before progress can take hold.
Evolving new realities, with complex roots, are putting the community and its governments under the most demanding economic stress they have encountered in the last 50 years. There are those who see outdated economic development strategies proving to be moribund. They reckon that to continue to follow these expiring strategies would only bring stagnation for the local economy.
It is observed that some town leaders are persisting in attempts to breathe life back into the community when its business model is showing signs of being broken. These leaders, many tied to the less than sober growth policies of the boomer era, are readying to push forward with significant millions of dollars in public capital expenditures. Some are hopeful it will jump start development with massive public investment.
These actions, critics are saying, could have the unintended consequences of depriving the community of badly needed resources necessary to give aggressive response in a rapidly changing global economy.
Some critics caution that there are those who would take tactical advantage by causing Vail’s municipal government to swallow a “poison pill” that would precipitously draw down its remaining financial resources.
Local businesses are increasingly turning to the local government for even greater subsidies. Drawing down the public financial reserves too early and for the wrong reasons, benefits those who would gain from the demise of the many local small businesses.
Many continue their struggle to keep the doors open. There are investment opportunities in local businesses.
Vail, it is being said, was one of the last to go into recession. Therefore, it has the prospect of emerging much earlier than its competition. Vail’s private sector can readily organize an investment fund to direct participation towards local businesses that qualify according to the terms of wait ing investors.
Those who voice concern are saying, “What now appear to be ample financial reserves in town coffers may not be sufficient when the time comes to cover operating costs.”
They also worry that officials are being pushed into spending large sums under the assumption it will revive a broken business model that limits its focus only to the domestic American market. The community, they save, should preserve its capital until it understands the dynamics of the “new economy.”
Premature spending could put Vail behind the curve when the new economy does take hold.
What these critics see is that the Vail community has not taken full account of the larger political and economic forces that are reshaping its future.
Core to these changes is a growing centrist political perspective that spending and taxation, at all levels of government, must be reined in. These political forces are widely at work in Colorado, and are expected to intensify over the next several years as they respond to an ongoing forecast of slow economic recovery.
Nationally, as the federal stimulus program is ending, most state governments are facing significant budget shortfalls, accounting for nearly 1 percent of GNP. There will be a ripple effect through all levels of government.
Town of Vail employees are asking for a one-time 3 percent bonus if the town’s sales tax revenues between January and April 2011 are increased by 5 percent over budget. Importantly, millions in capital construction projects are being funded, which will have the effect of ensuring that there will be limited or no reduction in staffing levels. Revenue projections are budgeted at a 1.5 percent increase above 2009 levels. Across all funds and revenue accounts through July, revenues are up 14.6 percent from the same period in 2009 and up 7.7 percent from the 2010 budget.