August 5, 2011 > Lt. governor releases plan to revive Calif economy
Lt. governor releases plan to revive Calif economy
By Adam Weintraub, Associated Press
SACRAMENTO, Calif. (AP), Jul 29 - Lt. Gov. Gavin Newsom's proposal to jumpstart economic development and job growth in California, unveiled Friday, drew support from business and labor alike as it focused on ``small wins'' that he believes entrenched political factions can agree on.
The proposal, however, dealt only in broad strokes with battleground issues such as taxation and environmental regulations that cause interest groups to dig in for a political fight.
``Everyone has their trophy, everyone has their agenda, and they start shooting at each other before we even sit down,'' Newsom, a Democrat, said.
By concentrating on steps such as creating a single economic development office high in state government and marketing California overseas to expand exports, supporters hope Newsom's approach can generate momentum toward progress on tougher issues during the next six months.
The report recounted the struggles of California's economy, which has lost a million jobs in five years. It also detailed strengths that could underpin new growth, including a culture of business innovation, access to export markets, an educated workforce, and a solid foundation in the emerging ``clean economy'' for products with environmental benefits.
Aspects of the plan drew praise from the California Chamber of Commerce, California Labor Federation, the state chapter of the National Federation of Independent Businesses and the California Association for Local Economic Development.
CalChamber CEO Allan Zaremberg said his group appreciated Newsom's emphasis on international trade, regulatory reform and ``the priority Sacramento policy makers must place on doing no more harm to our economy.''
Shortly after he was elected last year, Gov. Jerry Brown asked business leaders for ideas on how to boost job growth in technology and manufacturing. Brown attended at least one of the panel meetings with chief executives that fed into Newsom's report. Several of its recommendations were part of Brown's campaign platform.
Brown ``will continue to work closely with (Newsom) to expand California's job creation agenda,'' Gil Duran, a spokesman for Brown, said Friday. He called the idea for a cabinet-level office focused on job creation a positive suggestion that Brown will discuss with Newsom and legislative leaders.
Newsom is working with Assembly Speaker John Perez, D-Los Angeles, to send a bill creating that office to Brown's desk by September.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said he was looking forward to working with Newsom on steps to foster job creation and link education to the economy. Steinberg still hopes to pass legislation to streamline business regulations and assess their costs and benefits. His previous effort was shelved during spring budget negotiations with Republican lawmakers.
Newsom's proposal also calls for new or improved economic measurements, such as evaluating the benefits of various tax incentives. Some of those incentives were designed to lure companies to relocate to California but don't encourage the 95 percent of job growth that comes from startups and expansion of companies that are already in California.
The proposal by Newsom lays out the broad strokes of a plan to set the state on a course toward job growth. Among its proposals:
- Emphasize innovation and manufacturing, particularly by small, agile companies serving global supply chains. Encourage expanded exports of both goods and services.
- Re-establish a state presence in foreign markets to promote trade, starting with a privately funded office in China within 180 days, then one in Brazil.
- Remove thickets of ``onerous and inconsistent regulations, slow bureaucracies and misaligned policies'' that slow California businesses and impose barriers to global competition, without weakening standards.
- Plan education and job training with economic development in mind, emphasizing the skills workers will need for ``new economy'' jobs.
Business leaders appreciate the plan's emphasis on speed, measureable results and regular revisions to address changing conditions, said Carl Guardino, president of the Silicon Valley Leadership Group, which represents some of the world's largest technology companies.
The group paid $45,000 toward developing the report, about two-thirds of its cost.
Guardino praised Newsom's willingness to learn from others about better ways to foster economic development. Some fellow Democrats criticized Newsom for accompanying Republican lawmakers on a job-growth tour of Texas this spring, but ``there's a lot of stuff out there we can learn,'' Guardino said.
A group representing manufacturers congratulated Newsom for trying to make California more attractive to high-wage businesses, and expressed hope the effort would change past practices of picking winners, such as renewable energy, for state support at the expense of other industries.
The group is ``anxious to start helping,'' said Gino DiCaro, spokesman for the California Manufacturing and Technology Association. ``The essentials that any company needs for growth are simple: predictable costs, competitive costs, adequate infrastructure, access to skilled workers and regulatory certainty,'' he said.
Hard work lies ahead as Newsom, a business owner and former San Francisco mayor, steps to the forefront of the economic push - his first major policy move since he was elected to statewide office.
California remains mired in a sluggish recovery, with most counties at double-digit unemployment. A University of the Pacific economic forecast on Friday projected the state rate will stay above 10 percent through 2013, and federal data for the second quarter showed the national economy still sputtering.