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One month after the September 11 attacks, Berkeley businesses are still reeling from the economic impacts of a tragedy that made people afraid to fly, reluctant to spend money and sometimes too depressed to enjoy restaurant meals or theater shows.  

Berkeley’s hotel occupancy rates are down 30-40 percent, said Barbara Hillman, Berkeley Convention and Visitor’s Bureau President. This decline began before Sept. 11, she said, but the post-attack travel slowdown “added fuel to the fire.”  

“Everybody’s been hit,” Hillman said. “But you can’t force people to take vacations, you can’t make people fly.” 

Jobs for hotel workers around the Bay have often been the first casualties in hospitality industry cutbacks. Half of the employees at the Berkeley Marina Raddison have had their hours cut, said Wei-Ling Huber of Local 2850, the Hotel and Restaurant Employees Union. 

Officials said Berkeley’s restaurants and performing arts venues also took financial losses following the attacks. Hillman estimated that the city’s restaurants lost 40 percent in sales in the weeks after Sept.11. Bill Lambert, manager of economic development for the city, said that in the 30 days since the tragedy, there has been a “steep drop-off” in non-season ticket holder sales at the Berkeley Repertory Theatre.  

Local merchants in Berkeley’s commercial districts are planning promotions to encourage more sales. “We’re thinking of a ‘Shop Local’ campaign,” said Lisa Bullwinkel, Executive Director of the Solano Avenue Association and a board member of the Berkeley Chamber of Commerce.  

Bullwinkel said that merchants are planning promotions to encourage Berkeley locals to stay at Berkeley hotels. “People want to be connected with their families right now,” she said. “Hotels might offer packages for families who live in town, encouraging them to get out of the house for the weekend and spend time together.” 

But local officials say they don’t think that these economic losses will impact the city revenue. As San Francisco braces for a tax revenue crunch because of a slumping tourist industry, Berkeley officials say they are more concerned about a general economic downturn than direct financial losses related to the Sept. 11 attacks. 

When compared to San Francisco, “we have significantly fewer hotels and the hotel tax is less a piece of our overall budget,” said City Budget Manager Paul Navazio. 

Berkeley is home to only about 1,000 hotel beds, and hotel taxes generate just 1 percent of the city’s overall funds. 

Navazio anticipates that Berkeley’s budget will be well-insulated from the losses directly related to the attacks. “Our community is relatively less dependent on travel, tourism, and airlines, but like everyone else, we are impacted by general economic cycles,” he said. 

Other sources of tax revenue, including business licenses, parking fines, property taxes, and sales taxes, generate far more income to support city services. In the 2002 budget, sales taxes are expected to generate $14.8 million for city coffers, and parking fines $7.4 million. Hotel taxes are projected at just $3.7 million. 

“The Berkeley economy and tax base has less volatility” than other cities, Navazio said, because the largest employers, UC Berkeley, the city, and the school district, “don’t hire and fire in cycles.” Berkeley’s retail mix of boutiques and independent businesses, unlike stores like Costco, Target, or Home Depot, also tend to provide sales tax revenues that fluctuate less dramatically, he said. 

City Councilmember Kriss Worthington said that the council had already anticipated a general financial downturn before Sept. 11. “When we did the budget this year, we didn’t add a lot of new spending,” he said. “The budget is based on pretty fiscally cautious numbers to begin with.” 

Worthington said the Council built in reserve funds larger than “any time in history,” about 6 percent of the city’s general funds.  

Both Worthington and Navazio said they did not anticipate dramatic cuts in the city’s budget based on a decline in revenues. “We might make some small adjustments,” Worthington said.  

“But our bigger problem is the state and federal budget,” which allocates money to Berkeley for programs like homeless services or the city’s health department, Worthington said. Because of Sept. 11, Congress “may divert money away from social services and use the military as an excuse.”