The Excess Energy Tax is Economic Suicide for Humboldt County – Turn Out the Lights
Yesterday I sent you my analysis from 2012 about the Arcata excess energy tax.
A couple of months ago I sat in a room with a genius who schooled me about the importance of building resilient communities through the concept of import substitution.
This is a nice way of building local economies by identifying things that are used locally but imported and then substituting if possible locally manufactured goods for the imported ones.
Now there is this proposal for an “excess energy tax” which is being sold county wide as an environmental issue.
What it is economically is, is “export substitution”, it is the hollowing out of our local economy. It is the exact opposite of “import substitution.”
Lets assume that there are 1.000 indoor growers in Humboldt now. After the tax, these people will leave. They will sell their houses and relocate to another county or state. Real estate values will drop by at least 10%.
But the most pernicious aspect is that we will turn a net positive inflow of dollars into a negative flow out of Humboldt County. These indoor growers (I call them cottage industries) produce a product that is both exported and used here. After the tax they will be located elsewhere, but we will still be buying their product. It will have gone from being a domestic product to an imported product.
And of course we will lose the direct inputs of these people and businesses into our local economies.
I get it that indoor growing uses electricity. What kind of jobs do you propose for these people to do that pay $15 or more an hour and that don’t use electricity? Factories consume electricity! How many new little businesses will you have to “incubate” in Eureka, Arcata, Fortuna etc. etc to make up for the loss of 1,000 REAL small businesses, and where will that incubation money come from?
The only way that Humboldt to make up for this small business exodus would be for the big pot growers out in the sticks to ramp up their production. Of course that could have disastrous effects in the fragile countryside here and accomplish nothing as far as carbon loading on the planet. Because the indoor growers will be growing in the next county or state. That would solve the import/export imbalance but the big pot grows don’t provide any ownership or benefits to their workers besides agricultural jobs and trim jobs, all non-union and many of them low paying now. This is not the old mom and pop days when family and a few close friends were invited over to trim the 10 plant harvest. The same income inequality emerges. Let’s get real.
These small business people, these entrepreneurs are my friends along with the working poor. What am I going to say to them if I support a tax that will put them out of business? How do you expect people in the city to make a living? Working at Walmart? We don’t all have 20 acres on a hilltop to grow fine sun buds.
And as a patient, a consumer of cannabis, you must know that I buy mostly from local small growers. I can’t afford your fancy sun buds grown in Sohum or Mendo. Those are all grown for export to LA and NY. We cant afford that shit and its not offered to us on the streets of Eureka, where there is still no dispensary! As a patient, we want more production to drive these ridiculous prices down, especially on the local market.
So this tax will impact us poor consumers here greatly. As far as I am concerned this is a non starter and needs to be re-thunk.
So my question is. What are you all thinking?
I understand the need to reduce carbon loading. I get it that people don’t like grows in their residential neighborhood. As an advocate for poor people I really get it that housing stock should be for people not manufacturing. We have industrial areas of Eureka sitting abandoned. Lets put the grows there if we don’t want them in the neighborhoods.
If you insist on this tax without accommodating real small business by moving them to the industrial areas you risk losing the support of several thousand locals whose living depends on small scale cannabis production.
have a peaceful day,