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Receive a report on the Solano County 2023 Index of Economic and Community Progress
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended the Board of Supervisors receive a report on the Solano County 2023 Index of Economic and Community Progress.
SUMMARY:
The Solano County 2023 Index of Economic and Community Progress (Index) was prepared by Dr. Robert Eyler, president at Economic Forensics and Analytics in Petaluma, working in consultation with the County’s Administrator’s Office and the Solano Economic Development Corporation. The Index tracks key economic and community indicators that are shaping the local economy. This 16th edition of the Index commissioned by the Board of Supervisors includes labor market, business and income, population, education, and workforce readiness indicators for Solano County. The document is also available online at www.solanocounty.com/economicindex
FINANCIAL IMPACT:
The cost to develop the report is $20,000 and is included in the County’s Promotion FY2023/24 Working Budget. The cost to prepare the agenda item is nominal and included in the County Administrator’s FY2023/24 Working Budget.
DISCUSSION:
Background: The Solano County Index of Economic and Community Progress is a project that was launched in 2007 after a series of economic summits sponsored by the Board of Supervisors. Those meetings identified a need for more fact-based information to guide efforts by public and private sector leaders to expand the long-term viability of the Solano County economy. Three comprehensive editions were produced for 2008, 2009 and 2010 by the consultant Collaborative Economics for the County of Solano and the Solano Economic Development Corporation. The Index was compiled by the County Administrator’s Office for 2011 and 2012. Dr. Robert Eyler of Economic Forensics and Analytics reviewed the 2012 report and was retained to prepare the 2013 to 2022 reports and now the 2023 Index report.
The report includes labor, income, cost of living and inflation, and other data, trends and analysis. Jobs growth in Solano County continues in 2023 at a slower pace than in 2022 with 2019 used as a benchmark date in this Index. The number of Solano County residents working or looking for work remains under 2019 levels by approximately 5,000 workers; however, labor force growth is expected to continue through 2030, especially if annual population growth is positive on average, as in 2023. Inflation continues to pressure regional wages; purchasing power from wages after inflation is very slow to change across California and Solano County’s neighboring regions (Bay Area and Sacramento area counties). Commute traffic has returned as Solano County employers hire more workers who commute into Solano County than both live and work in the County. Unemployment rates regionally and statewide have increased in 2023, even with more hiring. Solano County had 1,300 more residents get a job and employers hired 1,900 additional workers in 2023, but the unemployment rate increased for Solano County to 4.7 percent in 2023 from 4.3 percent in 2022. For Solano County, housing prices are forecasted to fall slightly in 2024 as of March 2024 (approximately -0.6 percent). The following are a few key highlights from the 2023 Index of Economic and Community Progress which will be discussed at length in the Index, as well as during the presentation to the Board of Supervisors on June 25, 2024.
Key Highlights from the 2023 Index
Our Changing Economy:
• Solano County employers hired 1,900 more workers (farm and non-farm) in 2023, a +1.3 percent change from 2022, to 143,000 payroll workers.
• Solano County’s labor force increased by 2,200 workers in 2023, still 5,000 fewer than in 2019.
• 193,600 Solano County residents were employed in 2023, 1,300 more than in 2022 after data revisions.
• Solano County’s unemployment rate was up slightly to 4.7 percent for 2023 on average (unemployment was 4.3 percent on average in 2022).
• Key industries with job gains in 2023 from 2022 were leisure/hospitality and healthcare, while construction and manufacturing hiring fell slightly.
• Based on the most recent data, inflation-adjusted (2017 dollars) gross product in Solano County decreased by 5.9 percent in 2022 (the latest data), and the state and national economies grew 0.7 percent and 1.9 percent, respectively.
• Solano County’s personal income per capita fell in 2022 by $5,870 (-11.0 percent) after inflation from 2021, as inflation’s relatively high levels continued.
• Median household income increased in 2022 versus 2021 to $79,765 in 2017 dollars (+0.9%).
• Industry jobs focused on customers outside Solano County (“base” industries) fell by approximately 1,073 jobs in 2023 compared with 2022; locally-serving jobs increased by 1,453.
• Solano County median wages for local workers fell slightly in 2024 from 2023 by $0.66 after inflation but slipped below California’s median wage.
• Poverty rates among Solano County residents increased slightly in 2022 (the latest data) based on five-year averages, to approximately 9.0 percent of residents (8.9 percent in 2021).
• Cost of living in Solano County was estimated to rise by 9.1 percent in 2022 (the latest data), faster than state and national averages, undermining income’s purchasing power growth for county residents.
• Agricultural values for Solano County farmers decreased in 2022 (the latest data) by 4.1 percent after a record-high year in 2021.
• Social equity metrics slipped slightly in 2022 based on five-year averages due to inflation effects that fell hardest on Solano County’s African-American communities.
Our Changing Community:
• Solano County’s population increased by 920 in 2023 (+0.21 percent from 2022), as people leaving Solano County slowed, to 446,426.
• The population forecast for Solano County is 498,672 by 2050, as estimated in 2023.
• In the 2022-2023 academic year, Solano County’s high-school graduation rate decreased from the previous academic year (AY) to 86.6 percent; Solano County’s graduation rate remained slightly higher than the state average (which also increased).
• In 2023, Solano County’s median housing price increased 0.2 percent to $590,300; housing affordability decreased again in 2023.
• As of March 2024, housing prices were forecast to fall approximately 0.6 percent in Solano County through March 2025.
• 1,109 building permits were issued for new houses in fiscal year 2022-23, fewer than in fiscal year 2021-22, but growth above 1,000 per year continued.
• Approximately 3.3 million square feet of commercial space was permitted during fiscal year 2022-23, a surge in growth from the previous fiscal year.
• Estimated commuting time to work in 2022 (the latest data) was 32.7 minutes, less than 2021 using five-year averages, but among counties with the longest time to commute to work in California (53rd of 58 counties).
• The total assessed property value in Solano County increased to over $70.0 billion in fiscal year 2022-23, while taxable sales decreased again after inflation adjustments in calendar year 2023.
ALTERNATIVES:
The Board could choose not to receive this report; however, this is not recommended as this is an opportunity for the Board to learn about the economic indicators shaping the local economy.
OTHER AGENCY INVOLVEMENT:
The Index was prepared by the County Administrator’s Office in partnership with the Solano Economic Development Corporation (Solano EDC).
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION