The data is a few years old – 2014-2015 – but it paints us a picture that is not all that different from today. UC Davis is the single largest employer in the city – with 12,181 jobs, representing a whopping 37 percent of the total.
The next nine employers combine to only 3000 jobs – DJUSD, City of Davis, Sutter Davis, Unitrans, PG&E, Safeway, Nugget, Kaiser Permanente, and University Retirement Community.
According to the 2017 state of the city report, “Together, the top 10 employers accounted for 46.3 percent of all jobs in the city.”
The report notes something else – a point that we have been making for several years now: lack of retail sales.
The report notes: “Although Davis represented around 32 percent of the countywide population in 2014, according to the BOE, retail establishments in the City of Davis facilitated only 15.6 percent ($589,194) of countywide taxable sales, compared to West Sacramento and Woodland which facilitated 36.7 and 24.3 percent of countywide taxable sales.”
The report concludes: “Overall, the analysis indicated that the Davis Core Area features fewer residents, housing units, and jobs compared to other college-oriented peer communities. Compared to peer cities, the Core Area has above-average concentrations of employment in Retail Trade, Finance and Insurance, Real Estate and Rental and Leasing, and Accommodation and Food Services.”
There are those who would argue that UC Davis already represents the primary source of jobs in the city – and that is true. In fact, these numbers understate its total impact.
The UC Davis Economic Impact Analysis report from 2016 estimated that the total impact on the seven-county Greater Sacramento Region was $6.8 billion of economic output and 65,000 jobs, with the core campus in Davis contributing about $2.8 billion in gross economic impact along with 40,000 jobs.
But the total breakdown also demonstrates some shortcomings here.
The first problem is that, while the total number of campus jobs is robust, only about 2100 or so are full-time faculty jobs. Once you get past faculty and administrative positions, the number of high paying jobs decreases markedly.
If you look beyond UC Davis, the number of high paying jobs on the top ten employer list is fairly low.
That is precisely the problem that has been identified here. It is why despite the presence of UC Davis, a huge percentage of people who live in the city of Davis are employed elsewhere. They simply cannot find sufficient paying jobs in the city to afford to live here. By the same token, the vast majority of those employed at UC Davis live elsewhere – not being able to afford to live here on their salary.
But there is a second problem illuminated with these data – the lack of retail sales and thus the low percentage of sales tax generated. The Vanguard’s work, going back to 2016, shows the lack of per capita retail sales in the city of Davis (see this article from August 2016 for example).
That’s once again borne out by data featured in the State of the City report showing Davis lagging behind both West Sacramento and Woodland in retail sales.
This is a huge driver of the city’s revenue shortfalls. Our 2016 analysis showed that Davis was generating just $8.43 thousand in retail sales per capita compared to over $15 by Woodland and $26 by West Sacramento. At the upper end of our comparison cities were Palo Alto at $36 and San Luis Obispo at $28.
In the meantime, we continue to work backwards as a community. We have pushed through the MOU with the university to reach agreement on the impacts of university expansion, which has led to the city building new housing for students.
In the meantime, the university is largely generating revenue that is not going to the city of Davis either, because it is generating tax revenues in the county or because the city has just not leveraged the power of the university for its own good.
That trend is continuing with county and region-wide economic development spinning off from the university, whether it is the billions generated at the UC Davis Medical Center in Sacramento or the business expected to be generated at Aggie Square.
While I think it is easy to fault the university here for located core expansions in Sacramento rather than Davis, Davis has in a lot of ways made its own bed.
That has led to the city of Davis creating an upside-down and unsustainable revenue and fiscal model.
Right now the city is failing to leverage the advantages of the university, and has produced an economy that is largely based on government employment with a heavy secondary emphasis on health care and basic services.
What is largely missing from the local economy is private-sector job growth that can leverage the economic power of the university and take technology developed on the campus and develop it for private sector use.
The expansion of commercial space for these ventures will generate additional property tax growth as well as the potential for point-of-sales advantages. But not if we continue as we are.
Some have argued that this is where the university has the obligation to lead in this discussion – and I would agree with that. The problem is that the university, I think, feels that it has been burned in the past by attempting to work with the city, only to see its ventures shot down.
Aggie Square is the embodiment of this problem. The university clearly sees the future of their ventures in places like Sacramento, and perhaps even Woodland and West Sacramento where they don’t have to fight through land use, ballot measures and legal battles in order to move forward.
In the meantime, Davis is in danger of not being able to generate the revenue needed to sustain its high quality of life. The failure to leverage university capital and resources will come back to haunt this community as we struggle to find funding for even the most basic of infrastructure needs – roads and parks – and increasingly will rely on taxes to fund even the most basic of city services.
—David M. Greenwald reporting