California’s drought may have a lot of negative consequences, but a new report out today says the state’s economy won’t be one of them.
The report from Moody’s Investors Service finds, short term, California’s economy won’t suffer as a result of the drought. It finds the state’s reliance on income taxes and sales taxes will largely provide a buffer. H.D. Palmer with the governor’s Department of Finance, agrees the state’s economy has weathered the drought so far.
“That said if you are in one of the agricultural counties in the state, either in the Central Valley or on the coast where agriculture is a large part of your economy, the drought is not an abstract concept. It is real and it is now," he says.
The report finds local economies with a reliance on agriculture will see more negative financial affects in the short term but says those will be limited. It says federal and state aid, as well as grants and insurance programs will help offset any financial losses brought on by the drought.
A previous report from UC Davis finds more than 14,000 jobs could be lost as a result of the drought.