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It's time to diversify Calistoga's economy

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For a year we’ve been thrashed by Covid-19 — lives shivered, businesses challenged. Governments from Washington, D.C. to Calistoga, have responded to the distress. More might be done to help.

For example, Calistogans would have over $300,000 in their pockets next year if the city rebated as little as 5% of water and sewer revenue. If business license fees were eliminated, local businesses would collectively save almost $120,000. To address Calistogans’ immediate cash crunches those are modest measures. For the longer term, a thoughtful look to the horizon is appropriate. 

In Calistoga, we’ve hitched our economic wagon to one horse, tourism. It’s been a good horse. But no horse runs forever. A team of horses, however, can keep the wagon moving even when one steed stumbles.

Before the pandemic, a huge amount — over half — of Calistoga’s revenue derived from tourist taxes. Even in this fiscal year of pandemic-diminished traveling, Calistoga is still projected to rely uneasily on tourism for 41% of its revenue. 

Investment advisors counsel economic diversity for good reason. When one sector falters, others keep the wagon moving. As lucrative as tourism has been, we’ve learned it’s highly vulnerable to external events like fire and pandemic. That’s not even to mention run-of-the-mill recessions. Researchers recently advised Napa, “The need to attract new sectors ... is quite high as it isn’t sustainable to rely on selected few businesses.”  SSU economist Robert Eyler, Ph.D., has likewise suggested diversifying Napa’s economy.

So instead of pouring more funds into advertising for tourists, Calistoga can study alternatives. For example, it may want to invite and subsidize new, different enterprises. It might relax zoning that restricts alternative business activity. It could revisit the fairgrounds possibilities, because it is an asset still untapped. It might cooperate with St. Helena in its 2018 Economic Plan proposing upvalley events and festivals, pop-ups, and online retailing by which numerous St. Helena stores are thriving. It could urge the county supervisors to strictly limit food service at wineries which essentially compete with our restaurants. 

Directing funds towards other innovative ideas doesn’t mean abandoning the tourist trade. Business could still do marketing, augmented with funds saved from the license tax.  

Tourist-dependent interests may prefer the city continue helping advertise our town.  But in the last decade city hall has spent plenty of money — over a million dollars — on “economic vitality” (i.e. attracting visitors), and allocated $300,000 more this year. Calistoga’s reputation is established. Now, with tourism stumbling, it’s time to acknowledge our one-horse dependency and get serious about diversification. 

Pivoting to diversification, we may not be a wealthier town. But we will be more stable and more interesting.

Don Williams

Calistoga City Councilmember

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