The point of yesterday’s commentary was to show data to the community about just how few jobs there are in the city of Davis itself. Throughout the economic development discussion, those opposed to creating additional commercial space in the form of an innovation center have pointed to UC Davis as a center of employment and a driver of jobs.
Indeed, UC Davis is a center of employment and an economic powerhouse. Most estimates from a few years ago showed that the total economic impact of UC Davis was $8.1 billion annually for the California economy and 72,000 jobs.
Next to state government, UC Davis is the second largest employer in the Sacramento region.
So perhaps the question is why are we looking at jobs in the city of Davis when UC Davis has 24,000 employees on its Davis campus? Isn’t that enough?
Certainly from the perspective of employing high quality workers in the community and reducing our carbon footprint, there really is no difference between people in Davis working within the city proper and people of Davis working at UC Davis.
But when we start to dig deeper we realize that there are important differences between the two.
As Matt Williams put it in a very important comment, that Davis is an “aggregate community” which includes the UC Davis campus “is a very important perspective, but it isn’t the only perspective.”
Another perspective, he points out, is the fiscal perspective.
“The bottom-line of the City of Davis’ fiscal situation is that we don’t pay our bills … and we haven’t been paying our bills every year for well over a decade,” he writes. “Why does the City of Davis have only $61 million of Revenues, and $74 million of Expenses?”
From this perspective we start to see why jobs are important in the city of Davis.
Some are treating the two employers as synonymous because they are in relatively close proximity to each other and jobs on campus allow people who live in town to keep their VMT low.
But that’s not the end of the story.
Jobs at UC Davis are not equivalent to jobs in the city because they do not directly generate revenue for the city.
This is a key point. The innovation center generates revenue in largely two ways. One is property tax—the city gets to keep a portion of tax as a function of the value of the property. Indeed, one of the underrated advantages of this type of economic development is that the heavy capital equipment installed inside the buildings by the occupant is also subject to property tax.
The other way is through sales tax. Dan Ramos talked about the fact that they will be focusing heavily on things like advanced manufacturing, which has the potential to generate “point of sale” sales tax revenue for the city.
The university may hire people, but they do not contribute to city coffers with either property tax or sales tax.
Now, as some have pointed out, the university does bring advantages to the city. They point to “all of the economic activity that is created as a result of jobs at UCD. At its most basic level, it’s the reason for property tax valuations in Davis, as well as a host of other economic activity throughout the city. These people get salaries, and that money is spent in the city.”
I agree with these points, they are important.
But we are at a deficit in this city in terms of our revenue versus our expenses (actual spending plus shortfall). And UC Davis at this point is not going to increase our revenue. So we need to look elsewhere.
The poster also points out: “Davis has never been a major employment center on its own, and yet it’s existed for 100+ years.”
This an accurate point—the city of Davis has never been a major employment center, and it will not be a major employment center in the future. The point is a red herring. If the Innovation Center is approved and built, it will hire several thousand people. It will add $5.4 million—perhaps more to the city coffers—and it will not make Davis a major employment center. That is not the purpose.
The purpose here is to take some of the economic potential of UC Davis … specifically take the research UCD is generating … and transfer it to the private sector. That is what Sacramento is doing with Aggie Square and what Davis could do with DISC.
There is another point that was raised which needs elaboration: “UCD does have a lot of jobs (good ones, at that). Essentially, more than what’s needed for Davis residents.”
Yes and no.
UC Davis does have a lot of jobs. But when you really break down those 24,000 jobs on campus, you realize something — it is only serving a very narrow swath of the community.
There are well-paying jobs on campus: faculty positions, some staff positions, most administrative positions.
But if you do not have a PhD, or if you do not want to be an academic, the number of positions that are considered well-paying … specifically well-paying enough to live in this community … are actually fairly few.
And while UCD has many well-paying jobs, there also are many that are not well-paying. Adjuncts are not paid particularly well. There are 2,200 graduate assistants that are not paid well by any standard. You have food service workers, janitors, student employees, part time positions—none of those are paid extremely well.
The point here is not to disparage UC Davis — it produces many high quality jobs. The point here is to show that within those strengths are limits.
Basically, if you look at the employment chart you either work for UC Davis, for the government, for a health care company, in food service, or you work in a small business. Those who do not work at UC Davis are far more likely to work in Sacramento or the Bay Area because the number of jobs in the city that enable one to afford to live in the city are quite limited.
DISC won’t fix that completely, but it will provide some jobs for people who live in this community. Right now, according to the information provided to the Downtown Plan Advisory Committee, just 3,686 people live and work within the city of Davis. DISC and projects like that have the ability to change that and keep more revenue at home and help to close that city funding gap.
—David M. Greenwald reporting