Palo Alto Faces Grim Economic Outlook: Report

Palo Alto CA

15 December, 2020

6:52 PM

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PALO ALTO, CA — Despite surging coronavirus cases in Santa Clara County and throughout the nation there are hopeful signs that the worst of the pandemic could be behind us later this year with at least two vaccines that have shown promise in clinical trials. Cleaning up the economic mess left behind in the aftermath of the pandemic in Palo Alto will likely take much longer, Palo Alto Weekly reports. City officials project plummeting tax revenues that will make recovering from the crisis an uphill climb, the report said. Tax revenues are projected to fall $34.6 million, with sales tax revenues projected to drop $13.8 million and hotel-tax revenues falling $14.4 million according to the report. Stanford University's move to remote learning amid the pandemic has hit the city's hotel industry has been a big factor in the revenue shortfall, the report said. Thomas Adams of Avenu Insights and Analytics, which serves as the city's sales tax consultant, said that unlike previous downturns, the recession of 2020 has impacted restaurants and retail stores, businesses that aren't typically affected according to the report. Adams believes the recovery could take up to four years, the report said. "This pandemic recession is an artificially created recession due to constraints on regulation and consumer behavior relating to perception of safety and that sort of thing," Adams said. The recovery is expected to dominate City Hall's 2021 agenda, the report said, noting City Manager Ed Shikada's involvement in Uplift Local, an ongoing initiative that aims to boost the city's sagging economy. Read more at Palo Alto Weekly