Where's the Business At?

by Ed Duffy

I recently attended a Fountain Valley Chamber of Commerce Event at which a very capable and knowlegeable speaker outlined important demographic statistics pertaining to the City of Fountain.

One of the things pointed out was that there is a large discrepancy between the actual economic activity taking place within the city, and what one would expect to find, given the demographic information; something on the order of a 46% deficit. This was pointed to as a sign of opportunity. I saw it a little differently. To me it looked like a sign of a problem. Fountain has been growing for a number of years. The fact that there will soon be a large influx of new troops to the area is no secret. Why does a city that can support 9 widget shops only have 5? Some cite a "perception problem" on the part of commercial real estate developers. Others actually blame the residents for not spending more money within city limits. Isn't it remotely possible that city policy and practices may have something to do with the fact that investment dollars are staying away in droves, compared to the evident potential? If there's good money to be made somewhere "perception problems" wont keep investment away. Opportunity cost will. If one has to work twice as hard to make a dollar in area A than one does 10 miles away at area B, the money's going to go to area B.

No doubt, there will be announcements of the landing of some big box stores and national restaurant chains in the coming year, but the fact is, those types of businesses are money siphons as far as residents are concerned. They help beef up government coffers with sales tax, but the profits are packed up and shipped back to headquarters for distribution to the shareholders. A healthy local economy would include a good variety of independent small businesses, something many government officials have very little interest in promoting even though statistics show they create the vast majority of new jobs. You get more headlines, kudos and faster promotions landing 100+ jobs at a time. Of course policies like less regulation, lower taxes, the elimination or reduction of fees, could lead to 300+ businesses hiring one or two additional people each, but that wouldn't make the papers. It's the "Catch 22" of a "controlled growth" policy. Doing nothing or doing less might be the optimum course of action, but if you want to appear to be controlling something, you have to create controls.

What specifically can a governing body do to be more business friendly? Generally, don't base decisions and regulation on what the most irresponsible person might do if you don't explicitly forbid it. Eliminate the use tax. Don't charge a fee and require a permit for everything, just because you can. Don't go out of your way to find violations and reasons things can't be done. Ensure street level employees regard constituents as valued customers, not a nuisance. Most importantly, recognize that creating an atmosphere in which the smallest of small businesses can thrive is at least as important to the vitality of the local economy as bringing in another MegaMart.

I do wish the City success. We all want the same thing; a vibrant, sustainable, self-sufficient economy and a high quality of life. I hope that the powers-that-be will periodically take an objective look at what they're doing, how they're doing it and why. Often times the best thing a government can do to promote a strong economy is to stay out of its way.