We understand the need, under most circumstances, to keep a stiff upper lip in the face of a looming municipal financial crisis. Don’t spook bond underwriters and the housing market with doomsday talk. Don’t foreclose the possibility that a white knight might ride to the rescue by casting the situation as hopeless.
That’s how economic planners and analysts are framing the likely closure of the Navajo Generating Station two years from now. The jobs and the tax payments worth $51 million a year may disappear, but Page still has its dam, its lake and an attractive climate and outdoor recreation opportunities. If the downtown is spruced up a bit, tourism promotion is boosted and some job retraining is offered through CCC, the city will pull through. Throw in some solar and wind power stations, and it might even thrive.
We truly wish that scenario would come true – Page and its 8,000 residents don’t have it easy as it is, living as they do in one of the most remote locations in all of the Southwest. But that, of course, is the biggest problem: There’s not much margin for error when you live at the end of the road and help is a long way away. Pull out 413 very good-paying jobs at the plant, take away another 250 at the coal mine south of town, then lose another 150 just in Page from the decrease in secondary spending, and suddenly employment in the region is down by 10 percent.
A recent Phase I study of just the impacts in Page from just the closure of the power plan went down the list of where the layoffs might come from: eight in the schools, nine at the hospital, 10 in real estate, two dozen in restaurants, 17 in a variety of retail stores – the list goes on. Those might not sound like big numbers in a place like Flagstaff, with its 30,000 jobs. But Page has just 3,000 jobs, not counting those at the power plant. Once the layoffs start,, will others wait around until their number is called? And what about the nearby Hopi Reservation, with a budget almost wholly dependent on coal royalties?
Again, we truly hope that scenario doesn’t come to pass. But just because Page doesn’t make steel or cars doesn’t mean its economic future isn’t akin to the Rust Belt cities of the Midwest that lost their dominant industries all at once and have yet to find their footing. The difference is that the steel and carmakers didn’t telegraph their punches until the layoff notices went out. In the case of NGS, unless there’s a last-minute miracle, the doors close in 2019.
That’s a two-year advance notice, and we’d suggest that local leaders use it not only to plan for a long-term economic turnaround but to search for short-term financial relief. The banks and the carmakers got it in 2009 during the financial meltdown that led to the Great Recession, and they were not shy about calling it what it was: a bailout. The government guaranteed massive short-term loans that were eventually repaid under the theory that those sectors were too big to be allowed to fail. We say that size shouldn’t matter – sacrificing an entire community on the backs of volatile energy markets and climate change rules is neither efficient nor humane.
What would a bailout entail? The feds, county and state could start by holding the city and school district harmless for five and even 10 years from the loss of property and sales taxes that would destabilize the city and school budgets. They could set up a low or zero-interest loan fund to shore up mortgages and business loans that might go underwater as property values go down. They could write off the tuition charges for all students seeking new skills training and educational credits. And they could site and build renewable energy plants near the city, with the first customers for discounted energy the city of Page utility itself.
We could go on, but the point is this. Don’t just let a report that puts the economic loss to the city at $51 million sit on the shelf. Demand that in the short run there is an infusion of capital and subsidies into the city equal to or greater than that loss. It will likely take a decade or longer for the tourism sector to generate another $51 million in economic activity. In the meantime, don’t let Page descend into Rust Belt status that feeds on itself and frustrates any kind of economic redevelopment. Bailout is a strong term that requires a long look in the mirror and a resolve to do what it takes to find the money. Page has two years. When will it start?