Agree or disagree with Arizona's new legislation on immigrations, there is one economic reality currently facing Southern California that needs to be reviewed.
Political posturing and fighting between the Los Angeles and San Diego city councils against the State of Arizona may be doing more harm than good.
Last week the Los Angeles City Council made a half hearted attempt to "boycott" the state of Arizona and eliminate any service contracts currently in place with the state. The Los Angeles city council decided on May 12th to eliminate contracts with Arizona-based businesses due to recent immigration reform passed by Arizona's State Government. The true economic impact of Los Angeles eliminating these contracts is unknown but estimates have ranged from $10 million to $56 million per year.
This week Arizona promptly responded to the Los Angeles city council boycott with their own proposal, cutting off electricity to Los Angeles.
The Arizona Corporation Commission has suggested to state officials that they can easily eliminate the flow of electricity to Los Angeles. Currently Arizona power plants produce roughly 25% of the energy consumed by Los Angelenos.
Gary Pierce, the Arizona Corporate Commissioner of public utilities recently wrote in a May 18th statement to Los Angeles Mayor Antonio R. Villaraigosa:
"If an economic boycott is truly what you desire, I will be happy to encourage Arizona utilities to renegotiate your power agreements so Los Angeles no longer receives power from Arizona-based generation."
Anyone who has lived in Los Angeles for more than five years remembers the Eron debacle, our state's power crisis, and the ensuing "rolling black-outs" that Southern California faced during the summer of 2005. A steady supply of electricity is an absolute necessity for every business in Los Angeles.
Further down the coast the San Diego City Council may have also picked a fight with a state they cannot afford to upset. San Diego elected officials are considering a similar boycott as the one enacted by Los Angeles. Additionally, city officials have been quoted as calling Arizonans and their policies racist.
San Diego hotels, entertainment destinations, and restaurants are fearful they are going to lose a large portion of business this summer due to the political bickering. Arizona tourists who frequent the San Diego coast during the summer months have apparently been canceling hotel reservations in mass. Arizona residents and business owners who had conventions scheduled in San Diego over the summer appear to be mounting an informal boycott on their own.
In our slumping state economy San Diego and other beach cities desperately need the tourism dollars that the summer months bring. Desert residents from Arizona, Nevada, and New Mexico tend to make up a large percentage of California tourists who stay in town longer than a weekend. Escaping the 120 degree weather of cities like Tucson has made destinations like San Diego a hot spot for short distance tourism.
Tourism officials are trying to over-come the political arguments that will surely hurt their summer revenue. In a letter geared towards Arizona residents, San Diego tourist officials are asking residents to overlook local politics and visit the San Diego area for the great climate and beautiful beaches they have always come for.
However, as one political pundit has phrased it, "it's hard to get motivated about vacationing and spending money in a city where the elected officials call you a racist".
California, Los Angeles, and San Diego cannot afford to turn away much needed tax revenue during the upcoming months. Hopefully elected officials will reevaluate their position and work towards encouraging interstate commerce and tourism.