New economic report: ‘Tahoe Basin faces a long road to recovery’
INCLINE VILLAGE, Nev. — The Tahoe Prosperity Center recently released results of an economic study for the Lake Tahoe Basin, evaluating the economic impacts of COVID-19 and strategies moving forward.
The report highlights a continued decline in the overall local population, employment that hasn’t recovered from the Great Recession, and an opportunity for economic growth through non-tourism sectors.
“We feel it is critically important to always have up-to-date data before we promote decisions and policy changes,” said Heidi Hill Drum, chief executive officer for Tahoe Prosperity Center, on commissioning the study, which was authored by Beacon Economics, LLC.
Much of the focus of the study centered on the Tahoe Basin’s dependency on tourism and impacts due to the pandemic. The Lake Tahoe region, according to Tahoe Prosperity Center, is currently more than 62% dependent on its tourism sector, and its small resident population makes it more susceptible to COVID-19’s impact.
The ongoing effects of COVID-19 also make it more difficult to reverse economic losses, according to the study, as depressed demand results in job losses, and less consumer-driven tax receipts reduce local government’s discretionary spending power.
Beacon Economics forecast a number of those scenarios relating to sales taxes and transient occupancy taxes for jurisdictions around Tahoe, providing a picture of a rapid and protracted recoveries.
Under its rapid recovery scenario, Placer County’s jurisdiction in Lake Tahoe would be looking at $5.4 million less in sales tax revenue in 2020 compared to 2019. The county is forecast to bounce back in 2021, jumping from a forecast of $99.6 million in sales tax revenue in 2020 to $114.8 million in 2021.
Beacon Economics’ protracted recovery shows Placer County falling from $105 million in sales tax revenue in 2019 to $88.1 million in 2020, and then $99 million in 2021. South Lake Tahoe is forecast to experience the highest percentage of decline, falling from $5.5 million in sales tax revenue in 2019 to $4.5 million in 2020.
Beacon Economics also forecast transient occupancy tax revenue, and said it expects a 69.3% decrease for Placer County, which is the biggest percentage decrease of any of the basin’s jurisdiction. Under the protracted recovery scenario, Placer County falls from $22 million in 2019 to $6.7 million in 2020 before rebounding to $12 million in transient occupancy tax revenue in 2021.
Other key findings in the study include the reduction of the basin’s overall population, which has declined by 7,300 in the past 18 years. Employment in the region has also not recovered, and at the end of 2019, private-sector employment was 300 jobs short of its 2006 peak.
In order to combat losses related to COVID-19, Beacon Economics recommends the region to foster growth in sectors beside tourism, and to take advantage of the rise in telecommuting to attract more remote work to the region in an effort to fill some of the estimated 72% seasonal-related vacancies in unincorporated Placer County.
“The Tahoe Basin faces a long road to recovery,” the study concluded. “If the region’s experience following the Great Recession hinted at the need to diversify its economy, the current public health and economic crisis has only amplified it. Yet there is cause for optimism. Cluster development in non-tourism sectors has already taken root, and organizations such as the Tahoe Prosperity Center are actively brokering new relationships and fostering growth opportunities.
“A full transformation of the economy will not happen overnight. But by understanding historical trends, adapting to current conditions, and recognizing the need to change, Tahoe residents can expect a bright future.”
The Tahoe Prosperity Center held the first of three virtual Tahoe Rising Summit events on the report on Sept. 30.
The next discussion will be Oct. 14, from 10 a.m. to noon, and will focus on economic recovery.
“We are going to be talking a lot about workforce development issues at our next Tahoe Rising event,” said Hill Drum. “We have an expert keynote speaker to share ideas on what that means.”
Senior Program Associate at WestEd Manny Lamarre will serve as next week’s speaker.
The final discussion will focus on Tahoe’s economic resiliency, and will take place Oct. 28, from 10 a.m. to noon.
Tickets for the virtual summits cost $35 each and can be found at http://www.tahoeprosperity.org.
This article was first published Oct. 9 by the Sierra Sun and is republished here with permission.
September’s median home price across greater Reno-Sparks came in at $444,000, down slightly from the August mark of $444,900.