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In the long run, the sagging San Diego economy will get a boost from the fires. Insurance money will come in to the county, and homes will be rebuilt. "Reconstruction in San Diego County will eventually put a floor on the decline of the construction industry, which was going to be a drag on economic activity throughout Southern California," says Ross Starr, professor of economics at UCSD. "That drag will be alleviated." Much will depend on how rapidly the insurance money comes in, he says. The money generated by the rise in construction employment will boost retailing and other industries, he says. "San Diego was set to feel the housing recession; when insurance money comes in, it won't feel it as much." Steve Erie, professor of political science at UCSD, says hotel tax revenue will drop temporarily as tourism takes a hit, although Starr doesn't feel tourism will hurt for more than a week or so. Property tax revenues will take some punishment temporarily, says Erie. Sales tax receipts will drop for a short time. For the immediate future, "This will put a lot more stress on local governments at a time when they are barely afloat." He says there will be pressure from developers to rebuild. "Indirectly, this will put more money into the coffers." But, he warns, local governments face huge problems in the reconstruction period.
In the long run, the sagging San Diego economy will get a boost from the fires. Insurance money will come in to the county, and homes will be rebuilt. "Reconstruction in San Diego County will eventually put a floor on the decline of the construction industry, which was going to be a drag on economic activity throughout Southern California," says Ross Starr, professor of economics at UCSD. "That drag will be alleviated." Much will depend on how rapidly the insurance money comes in, he says. The money generated by the rise in construction employment will boost retailing and other industries, he says. "San Diego was set to feel the housing recession; when insurance money comes in, it won't feel it as much." Steve Erie, professor of political science at UCSD, says hotel tax revenue will drop temporarily as tourism takes a hit, although Starr doesn't feel tourism will hurt for more than a week or so. Property tax revenues will take some punishment temporarily, says Erie. Sales tax receipts will drop for a short time. For the immediate future, "This will put a lot more stress on local governments at a time when they are barely afloat." He says there will be pressure from developers to rebuild. "Indirectly, this will put more money into the coffers." But, he warns, local governments face huge problems in the reconstruction period.