The field of CEQA bills being considered by state lawmakers—which numbered more than two dozen a few months ago—was dramatically reduced this week, with most bills failing to make it out of committee before this week’s legislative deadline.

As expected, the two bills that propose the most comprehensive changes to the law survived the committee process and will now move to the Senate floor—Sen. Noreen Evans’s environmentally-friendly proposal to broaden CEQA’s scope (SB 617) and Sen. Darrell Steinberg’s business-backed reform bill (SB 731).

Evans’s CEQA expansion: Will it pass?

While Sen. Evans’s bill also offers an array of procedural changes to the law, it has raised the ire of business groups with its proposal to reverse a court decision in the Ballona Wetlands case. The legislation would require developers not only to demonstrate how their projects impact the environment—as CEQA currently requires—it would also mandate that they show how the environment (rising sea levels, for example) would impact their projects.

“The notion that we not address the impacts of the physical environment on a proposed project is irresponsible in the extreme,” Sen. Evans said during a committee hearing about the bill earlier this month, pointing to a decades-old case near Bodega Bay where PG&E once proposed building a nuclear power plant on an active earthquake fault. “Under the law, the board of supervisors can’t take into consideration that there existed an active fault right where the project would be—despite the risks to public health. That’s the reason for this bill.”

(It’s worth noting that the controversy over the plant occurred in the 1950s and 1960s, more than a decade before the passage of CEQA, and after significant local opposition to the proposal, PG&E did not build a power plant in Bodega Bay.)

The California Chamber of Commerce has singled out Evans’s legislation as a “job killer” because of its proposed expansion of CEQA. “A project’s impact on the environment, that is what CEQA is about,” Mira Guertin, a lobbyist for the Chamber, said this month. “The other conversation, that should happen – but it should happen as part of land-use decisions, building codes. It’s a conversation we want to have, but not in CEQA.”

So what are the bill’s chances? It seems to be moving steadily through the Democrat-controlled Senate, and it could find an equally friendly audience in the Assembly. Will the Ballona provision be dropped along the way? Would the governor veto it? That’s still anyone’s guess.

As for the Steinberg bill…

The governor made no mention of the Evans legislation in remarks this week at CalChamber, where he publicly threw his support behind Steinberg’s bill—which the Chamber, along with several other state business groups, has endorsed. Gov. Brown called CEQA reform “a heavy lift,” but said he would “work hard to pass it.”

Even with the governor’s support, as we’ve noted recently, Steinberg’s bill, too, faces an uncertain future. Bones of contention remain for environmental groups over how Steinberg proposes to set new “thresholds” for environmental impacts like traffic and noise. (The bill leaves it to the governor’s Office of Planning & Research to set those guidelines—an approach that would likely delay the bill’s implementation for several years.) Labor’s views are unclear, and Steinberg himself, with the budget debate heating up, may have other priorities for the time being.

Steinberg’s CEQA reform effort did win a major endorsement this week from the Los Angeles Times, with the paper’s editorial board offering a blunt, but fair, assessment of his legislation. “Reforming the law…requires striking a delicate balance between preserving [CEQA’s] protections and curbing its unnecessary job-killing costs and delays,” the editorial said.

The paper concludes that Steinberg’s bill, with its focus on infill developments, “might not resolve all the valid complaints about the law, but it moves the state in the right direction.”

The editorial certainly doesn’t pretend the legislation will achieve the long-lasting reform Steinberg has said he seeks—but the paper’s board, at least, seems okay with that:

In striking its balance, Steinberg's bill leans in the direction of environmental protection rather than rewriting the law to open the construction floodgates, and that's fine. Builders see this as minor progress, and there may be further emendations to be discussed in the years ahead. But better to err on the side of caution, measure the results of this modest reform and then see what, if anything, needs modification, rather than rush ahead and possibly undermine the law's environmental protections.

That may not be enough for the law’s would-be reformers—but with the legislative window continuing to narrow, Steinberg’s bill in its current form seems to the best that can be expected this year. 

Speaking Wednesday at an economic forum in Weaverville, state senator Jim Nielsen championed the idea of a rural renaissance for the economy of the Butte region of California.

"It's only going to get worse from Sacramento," he said, "It's only going to get better here."

In 2012, community leaders launched the Chico Stewardship Network to promote the region's people, place and economy. They believed that communities work best when citizens adopt a widespread ethic that engages everyone to participate in the success of their community.

"We're here to practice the art of self-governance together," said Rory Rottschalk, opening the North State Regional Economic Forum on Wednesday. "We will create a conversation between engaged citizens and state policymakers so that real issues find a home at the state policy level." 

The forum's Briefing Book gave a rundown on the state of the rural region's economy and showed the unemployment rate has dropped significantly but still stands around 14.3 percent, high above the statewide number.

Becky Morgan, former state senator and founder of the California Stewardship Network, continued the regional stewardship theme and suggested organizing regionally may make more sense than the school district, city, county or state level.

"What the state needs doesn't have a lot to do with boundaries," said Morgan. "The question is, what boundary works for the people of Butte based on the needs here?"

So what's lacking to fuel the economic engine of the Butte region? Speakers noted the need to continue to invest in education and develop the workforce, to expand broadband access, and to encourage collaboration across local jurisdictions. And connecting the region's products to the larger national and global economies is key to success.

The forum focused on two successful regional initiatives: accessible capital for growing and start-up businesses and creating manufacturing jobs in the region.

Jack Coots spoke of the vision of Innovate North State to transform the region into the most economically competitive, non-metro region in the United States by 2017 by focusing on innovation-based growth companies. It's all about connecting to compete, said Coots, and "connecting with national and global customers, talent, media, research and the like-minded."  (Check out our blog on the work of Innovate North State here.) 

Likewise Marc Nemanic, executive director of 3CORE, spoke of the need for capital, collaboration and coaching. New and growing companies need the support of an entrepreneurial ecosystem. His company aims to support them with small loans for which they may not qualify through traditional lending institutions. The philanthropic seed fund is set up for social return: business growth, job creation and leveraging local private investment.

Related: Read more about 3CORE's seed fund in our blog.

The priorities that are set at the Summit's Regional Forums, like Wednesday's Butte region event, will inform the agenda at the second annual California Economic Summit in Los Angeles on November 7-8. 

No matter whom you ask—state or local elected leader, economic developer, community member--someone has an opinion on the California high speed rail project.

Approved by voters in November of 2008, it has now become one of the most talked about infrastructure projects in the state.

In July, Governor Jerry Brown signed a construction financing bill for the initial stage of the project, which will be used to build an initial 130-mile track of high-speed line in the Central Valley.

Once completed, the system would serve major cities including Sacramento, Stockton, San Francisco, San Jose, Fresno, Bakersfield, Palmdale, Los Angeles, Anaheim, Riverside, Irvine, and San Diego.

California Forward recently caught up with the mayor of Fresno and the lead executive of the California Partnership for the San Joaquin Valley at the second annual Regional Economic Forum. They gave their two cents on the project.

California's transportation infrastructure needs are well documented. Those who follow the state's infrastructure needs would most likely give California poor marks when it comes to finding smart ways to pay for and prioritize projects.

The California Transportation Commission puts our unfunded needs at $200 billion just to maintain and rehabilitate existing state and local transportation systems over the next ten years. If that's not alarming enough, the state needs another $100 billion to improve and expand the system over the next ten years as well.

Thanks to a massive solar project in Imperial County, some of that region's infrastructure needs are being met.

The Tenaska Imperial Solar Energy Center South just handed over $500,000 to the Imperial County Local Transportation Authority (ICLTA). It's a significant funding source for transportation improvements in the region.

"The Local Transportation Authority will use the Tenaska Imperial Solar Energy Center South sales tax proceeds for transportation improvements throughout the county, benefiting the transportation needs of each incorporated city in Imperial County and the county as a whole," said Mark Baza, ICLTA executive director.

"And those projects would be everything from pedestrian and bicycle safety projects, to pavement rehabilitation projects, to traffic signal improvements, and safe routes to schools. Some of the money will be to help our transit operations and regional highway projects in Imperial County."

Tenaska was the first solar developer to make a commitment in its conditional use permit to declare Imperial County the point of sale for all of its solar panels and other goods and services associated with construction. Because of that, the county and the ICLTA can collect local sales tax on the transactions.

"Tenaska estimates that $3 million in sales tax will come from their project and so that is huge and they've awarded about $20 million in contracts to local companies, construction companies. It's a big deal for a county that during the peak of the worst of the recession, our economy had about 30 percent unemployment. We're still in the mid-20 percent range of unemployment, so any increase in jobs is a big deal to us," said Baza.

"We expect, by the time they are done, over a million dollars will be generated for our roadway projects."

Tenaska may be the first, but it won't be the last.

"The county has other renewable energy projects that are coming on-line that they are requiring that the point of sale is tied to Imperial County."

This is a game changer for the region, as, like many other California region, where infrastructure needs are great.

"We're in the process of developing transit centers for our different cities, we're developing and increasing our transit services, we have regional highway projects that are important for the movement of goods through our region from the border of Mexico to the rest of the Southern California region and other destinations throughout the U.S., so our pavement rehabilitation and pavement of roads that are currently not paved is a big deal here in Imperial County," said Baza.

"The benefits of the Tenaska Imperial South project for Imperial County continue to grow—from the creation of hundreds of local construction jobs to what now tops $1.5 million in local sales tax payments," said Robert Ferrara, Tenaska director, development. "This project is helping support the growth of the new economy countywide. Good transportation systems support commerce, moving goods to market and allowing workers to commute to and from jobs."

Increasing investment in the state's infrastructure has been voted a top priority in every one of the Summit Regional Economic Forums going on right now across the state. Making sure California's goods can move will be one of the differences between a growing economy and a stagnant one, regionally and statewide. 

-Special report from events being held across the state to revitalize the California economy, including the California Economic Summit's Regional Forum series.

Surrounded by the opulent trappings of San Francisco's historic Fairmont Hotel, executives from some of California's most powerful corporations sought to convince the hundreds of participants of this year's Greenlining Economic Summit that they have become socially responsible corporate partners – that they care and are involved in the communities they serve and that their workforce reflects those communities.

The annual Summit, Greenlining Institute's marquee event, has become a vital forum for the state's social justice and racial advocates. The Greenlining Institute's coalition is comprised of a "Who's Who" of the state's most influential racial equity, environmental justice and consumer advocacy organizations in California.

Greenlining, celebrating its 20th anniversary, was known in its early days for its confrontational tactics when dealing with corporations on environmental, social justice and workforce issues.

Greenlining Institute's Executive Director Orson Aguilar was quick to point out to the crowd regarding corporations practicing true social responsibility, "you can count them on your fingers in California. Too many don't get it."

While CEO Debra Reed from Sempra Energy acknowledged her company and Greenlining locked horns frequently over the issue of corporate social responsibility, she said her company believed even back then "Greenlining should be patting us on the back" for their efforts. But she said both the company and Greenlining have learned to make their relationship more productive and less combative. And she provided some company figures claiming a 50 percent diverse workforce as well as a much more diverse list of contractors.

But Wells Fargo Bank executive Jon Campbell didn't ask for any pats on the back for his company's diversity efforts. "We need to push ourselves," said Campbell, the Executive VP of Governmental and Community Relations. "While we have great numbers regarding women and diversity in our workforce, at the senior level it doesn't look that way."

Participants we talked to tried to give these companies the benefit of the doubt regarding their efforts to work more productively with the state's new diverse majority. Acelia Gallardo, a Berkeley-based businesswoman, thinks the companies that came to the Greenlining Summit Friday are trying to do, "as much as they're capable. They can do more but it's something I see they're working on." But Gallardo, founder of Casa de Chocolates, said the fact these companies even showed up is testament to how much things have gotten better.

Omar Wandera, an Oakland educator turned entrepreneur, said the simple fact that corporate social responsibility is still a hot topic means there's lots of work left to do.

"They're taking baby steps, putting their toe in the water," said the founder of Kid Snapback, a children's clothing line. "Until there's no conversation about [corporate social responsibility], you haven't gotten it done. You can go to the websites of some of these companies and see photos of multi-racial employees but when you click on the board of directors page, you won't see that diversity."

Claudia Aguilar, a Hayward high school counselor, said she's convinced these companies are "being forced to think about it and that it's finally on their agenda." She said like Gallardo, she's convinced companies are making an effort but that's not enough.

State regulators agree not enough has been done and that regulation plays a critical role. "We've seen the numbers move dramatically because we shined a light on them," said Mark Ferron, a CA Public Utilities Commissioner. Ferron, a former banking industry executive, said while regulators can't force companies to hire more diverse employees and executives, they can highlight those efforts.

"One of the things we can do is bring transparency to the issue," he said. "Transparency works, especially when there's competition." Ferron told the crowd that letting customers know which companies are more reflective of their communities can be an important tool when it comes to increasing diversity.

Federal regulator Stuart Ishimaru agrees. "There's two motivations [for corporate diversity], social good or the fear of getting caught not doing it." In the end, Ishimaru, Director of the Office of Minority and Women Inclusion at the Consumer Financial Protection Bureau, said, those companies that lead their industry forward are going to get recognized for it and that just makes good business sense.

One in four manufacturing jobs in California is dependent on exports. (Photo Credit: Lance Cunningham)

Getting an A on a test or a report, in school, was the best feeling--knowing all of your hard work paid off.

Well, the California Community Colleges Chancellor’s Office was just awarded an “E” for the system’s contributions to the increase of U.S. exports—it’s like an A, as it’s the highest U.S. government recognition any American entity may receive for supporting export activity.

The award recognized the system’s Centers for International Trade Development, which Jeff Williamson oversees, from his office at the Riverside Community College District.

“This award recognizes our work over the last several years. One in every four manufacturing jobs in California is dependent upon exports, which combined with service and related industries support an estimated 1.2 million jobs in the state. So making sure we help those companies is very important to the economy.”

There are nine Centers for International Trade Development up and down the state that help thousands of companies each year in conducting international business. The centers are supported by grants through the Chancellor’s Office’s Workforce and Economic Development division. Those investments help power the Golden State’s economy and its global competitiveness through industry-specific education, training and services that contribute to a skilled workforce.

“As part of community college system we are able to identify what those businesses current needs are and we can feed it back into the classroom so that the concept, the skills, the knowledge set that are needed, we can transfer that back to the colleges and they can prepare that next base of workers with that set of knowledge so they can build on it and actually become competitive,” said Williamson.

“The Center for International Trade Development has been a big part of our workforce training focus for two decades and we’re proud of what we have accomplished over that time,” said Chancellor Brice Harris. “We know that helping businesses get their products to foreign markets means providing them with training and access to funds. I believe we provide that service better than anyone.”

And that help is important and useful because 96 percent of California's exporters are actually small businesses and $159 billion worth of products were exported from the state.

“We need to, as a state and a nation, to fully be committed to promoting exports as a means for economic development,” said Williamson.

“Globalization really affects every enterprise—either direct or indirectly. As we start moving toward the year 2020, for example, there will be nearly a billion middle class consumers in Asia and Southeast Asia. What this means is that $10 trillion consumption or purchasing power. So we’re going to have almost a whole U.S. economy in Asia.”

The Presidential “E” Award was created by President John F. Kennedy in 1961. To date, more than 2,500 firms have been recognized.

“We are honored by this recognition by the White House. Our community college efforts in exporting align well with the Governor’s emphasis on growing jobs.”

“The California Community Colleges CITD’s have been a valued partner for GoBiz in implementing its global trade agenda, particularly in supporting small businesses to expand globally,” said GoBiz Director Kish Rajan. “We congratulate them on this national award and look forward to many years of continued mutual support.”

California's exporting has lost some of its power over the last decade and anything to help the businesses working to sell overseas should benefit creating jobs right here in the Golden State. 

(Photo Credit: Franco Folini)

For Oscar Chavez, it was a moment of clarity. When regional leaders in Sonoma gathered in 2007 to develop a 10-year economic strategy for the county, they found an unlikely obstacle standing in the way of the region’s economic growth. Nearly one in two Latino students in the county—one of the fastest-growing segments of Sonoma’s population and the foundation of the region’s future workforce—don’t graduate from high school.

“We don’t always like to acknowledge this in Sonoma, this beautiful place where people come to play and go on vacation,” says Chavez, executive director of Community Action Partnership, a nonprofit devoted to helping low-income families overcome poverty, health problems, and the many other issues that so often result from dropping out of school. “But to solve this problem, we really needed to peel back the veneer and say, ‘We’re great, but we have to do better for the people of our county.’”

To their credit, says Chavez, this is exactly what many other county leaders concluded, as well—and Sonoma made closing the achievement gap a top regional priority in its 2009 Strategic Economic Plan. It also made the economic case quite clearly, showing closing the achievement gap would result in nearly $800 million of increased economic output in the next ten years, thousands of jobs, and $53 million in new revenue. “The fact is, people here have bought into the idea that the most significant thing we can do to improve our workforce and attract more businesses is to close this gap,” says Chavez.

Sonoma first steps toward achieving this goal—through a new initiative called Cradle to Career—are featured in a recent Stewardship Network report. The report highlights how a historic partnership has come together in Sonoma to take on the task of aligning all segments of the county’s educational continuum—from early childhood programs to college-preparation and workforce training—in an effort to improve outcomes for Sonoma County youth.

Together with groups like Community Action Partnership, the California Economic Summit is working to scale up similarly innovative regional efforts, joining with dozens of regional organizations across the state to pursue a shared agenda that will create jobs, keep California competitive, and help regions like Sonoma rebuild their workforce pipeline.

Moving the needle

“Observing the dynamics here have really led me to believe that while the issues we face are difficult, we can move the needle in a very significant way,” says Chavez. “Even the board of supervisors is unique: They’re not afraid to venture into areas where traditional government hasn’t ventured, and there is a genuine spirit of engagement and collaboration here that has a lot of community support.”

Perhaps what’s most unique about Sonoma’s approach is just that—the level of collaboration and leadership provided by the county government. While the Cradle to Career initiative has brought together stakeholders from school officials and nonprofits to industry and health advocates, the effort is managed by a county department—the Department of Health Services—which serves as the initiative’s “backbone,” says Chavez.

“The county department heads have been really visionary about how to address problems,” he says. The health department has its own goal of trying to make Sonoma the healthiest county in California by 2020—a task county leaders realized could only be accomplished by dramatically improving the region’s educational outcomes and income levels, the two key determinants of health and well-being.

“Economic policy is health policy and education policy is economic policy—they’re all interrelated,” says Chavez. “The interplay of those problems is what we need to be focused on, and we’ve all bought into this notion that if we really want to get serious about education in our community, we have to disrupt these systems that are no longer working for young people.”

So where to begin? While Sonoma County may manage the effort, Cradle to Career is built on the premise that complex social issues can’t be solved only by one organization or one sector. This fall, the initiative’s growing list of partners agreed on a detailed set of goals to ensure youth in the county are provided they support they need “across the educational continuum,” as Chavez puts it.

What the continuum looks like

The CSN report details the initiative’s approach, outlining the goals it has set for itself as well as its first implementation steps:                             

Every child enters kindergarten ready to succeed - Cradle to Career aims to connect young children with health services and provide caregivers with the support they need to create positive learning environments for their children, particularly in low-income communities.

Every child succeeds academically- By supporting more relevant and engaging learning opportunities, giving students additional support during key transitions, and developing a mechanism to collect and share common data to help at-risk students, the Cradle to Career Initiative is helping all Sonoma Youth succeed academically.

Every child is supported in and out of school- By aligning and integrating support services with schools, students can access programs that help prepare them for successful transitions to adulthood, while families can also access the resources and support services they need.

Every young adult is prepared to achieve life and career goals - Cradle to Career aims to connect employers with school systems to better align curriculum with real-world opportunities.

Every young adult thrives and becomes a contributing member of the community - Creating pathways for young people to get involved with civic life and to develop leadership skills helps to ensure that young adults are contributing, civically-engaged members of the community.

Cradle to Career is now rolling out a series of “launch actions” in different parts of the Sonoma region, with Chavez’s group focusing on the part of the county with the greatest educational disparities—Southwest Santa Rosa. With the support of the County Office of Education, Community Action Partnership is partnering with the Santa Rosa School District to take the first step toward making Cradle to Career a reality by transforming a low-performing middle school into a full-service community school.

“We’ve set out to really illustrate the whole Cradle to Career movement in one segment of our community,” says Chavez. On one school campus, his group plans to build preschool facilities for more than 200 children, a large family resources center for students and their parents, and a career and technical education programs for those seeking work. The group announced in March that it has received its first $1.4 million grant.

“We’re aiming to realize the whole continuum,” says Chavez. “Cradle to Career may be a recent phenomenon, but what’s exciting is how fast it’s been embraced by our community and how fast we’ve been able to bring people together.”

The work ahead may be challenging, but together, Sonoma leaders are preparing to take it on.

It continues to be a mixed bag for the California economy. In fact, sometimes the signals are downright confusing.

The state's unemployment rate for April dropped to 9 percent, the lowest number in a while and down from 9.4 percent in March. But the job growth numbers don't indicate a looming recovery. The state added only about 10,000 jobs. The LA Times, among others, said it may be that just a lot of people have stopped looking for work.

ADP, the payroll company that monitors employment, said that the job growth in California was anemic, reporting that only 2,700 private sector, non-farm jobs were added in the state.

On the other hand, construction jobs showed a healthy increase. Over 7,500 California construction jobs were added in April. And makes 45,000 construction jobs added over the past 12 months.

"The large surge in residential permits so far in 2013, combined with rising home prices will bring a boost to the economy going forward," said Steve Levy, the Center for Continuing Study of the California Economy.

Levy pointed out that the unemployment rates are dropping in some of the hard hit regions of the state, particularly in Southern California. Unemployment is L.A. County is 9.3 percent and 9.6 percent in the Inland Empire counties of Riverside and San Bernardino.

Northern California's rates are much better, below 6 percent in San Francisco, San Mateo, Marin and Napa Counties.

The same sort of mixed signals were coming out of Sacramento this week.

Governor Jerry Brown's May Budget Revision speech reflected the uncertainty and he urged restraint in how the state should spend $4.5 billion revenue increase it has experienced this year. He said the money was a one-time event and shouldn't set off a new wave of spending. He proposed putting much of the money in education, which had been cut in past budgets.

His restraint won him high praise from business leaders who are also a little worried about what some are calling the state's fragile economic turnaround.

"The California Business Roundtable commends the Governor for his prudent and balanced May revision of the proposed state budget," said Robert Lapsley, president of CBRT in a statement reacting to Brown's revision. "We believe it is the right course given the current and projected state of California's economy."

And California Forward, which is working with the California Economic Summit with the goal of creating more middle class jobs in California, also weighed in congratulating the Governor for his restrained tone.

And then on Friday, to add to the intrigue, the Legislative Analyst Office said it thinks that the state may generate $3.2 billion more in tax revenue more than the Governor projected. But even with that, the LAO urged caution in any spending.

So whether things are really turning around or not depends on how you view it.

For one, Levy remains optimistic that things are really turning around, despite the slow growth of the national economy and the uncertainty of the global economy.

"The California economy continues to make steady progress in job growth and reducing the still high rate of unemployment," said Levy. "The wealth of Californians is being rebuilt by increases in home prices and the stock market. And across the state one sees building everywhere. The state continues to make economic gains driven by technology, foreign trade and tourism and now a surge in home prices, sales and new building."

The state budget continued to muscle CEQA off the political stage this week, with the governor announcing a less-rosy fiscal forecast than many had expected—and the lukewarm response from Democrats offering a glimpse at just how much CEQA reform’s foremost champion, Senate leader Darrell Steinberg, currently has on his plate.

Only a few days after wading back into the state’s complex water issues, Steinberg also led Democratic lawmakers’ pushback against the governor’s top budget priority—a new funding formula for schools—along with an array of other proposals affecting everything from the courts to health and human services.

“There’s a disappointing aspect to [the governor’s budget],” Steinberg said, voicing concern among Democrats that the state isn’t doing enough to restore cuts made during the recession. “The budget debate [now] begins in earnest,” Steinberg warned. (That conversation has become even more heated after the LAO’s released its analysis of the state’s fiscal situation today.)

With CEQA reform also waiting in the wings (a task so politically complicated Steinberg has jokingly said his legislation could be called the “How to Make No Friends Act”), it does beg the question: How much can one man do?

CEQA to the back burner?

It’s true that it’s been only a few weeks since Steinberg released the details of his CEQA proposal, which he says is aimed at finding “that elusive middle ground” between the interests of business, environmental, and labor groups. (Click here for our summary of the bill.)

In its current form, Steinberg’s bill has already earned the support of several important business groups, including the California Chamber of Commerce and the California Manufacturers and Technology Association. Environmentalists remain wary of some parts of the proposal (setting thresholds for environmental impacts like traffic and noise, in particular). Organized labor’s views remain mostly unknown.

Gov. Brown himself has acknowledged CEQA reform is so difficult, “it’s not something you get done in a year”—even, presumably, when the political stars are aligned and lawmakers can focus on the issue. (The governor's office has since walked back some of those comments).

With the debate about the state's fiscal situation escalating this week, it's likely that the budget—and not CEQA—will become Steinberg’s top priority. The Legislature has a deadline of June 15 to negotiate its way through $96 billion worth of budgetary details. It’s only natural to believe that will be a distraction—and that for the time being, CEQA will remain on the back burner.

Regions push for change

The vagaries of the budget cycle certainly haven’t dampened the push for CEQA reform outside the capital. As the California Economic Summit continues its series of sixteen regional forums across the state on creating jobs in California—an effort that will culminate in the second-annual Summit this November in Los Angeles—updating CEQA continues to emerge as a top priority.

In forums from the San Joaquin Valley and Sierras to the Bay Area and Orange County, regional leaders from the fields of business, education, labor, and the nonprofit sector alike believe abuses of the law are standing in the way of sustainable development in the state.

At a recent forum in San Francisco, a group of economic development experts agreed that without making changes to CEQA, regions like the Bay Area simply cannot address one of their most pressing needs: Rebuilding the state’s crumbling infrastructure.

A recent study concluded that after years of neglect, California is currently facing a $765 infrastructure “deficit” over the next 10 years. To meet the needs of a growing population, the state must find a way to make investments in everything from public transit to crumbing school buildings.

“I would say CEQA is part of our state infrastructure deficit,” said Steve Heminger, executive director of the Metropolitan Transportation Commission, the Bay Area’s regional transportation planning and finance agency.

“The single free-est thing”

"When you talk to elected officials in Sacramento about infrastructure spending, you can see their eyes glaze over. But this isn't just about goods movement or connecting workers with their jobs—it's about making [expensive coastal regions like] the Bay Area more affordable," said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association (SPUR), a group that promotes long-term planning and sustainable infill development.

"If we can invest in transportation systems and transit, and we can get people down from two cars to one, we'll allow a lot more people to live here. We'll all benefit from that."

With the state once again facing an uncertain fiscal forecast, finding a way to pay for these investments remains elusive. Metcalf, for one, believes CEQA reform offers a solution: "Updating CEQA is probably the single free-est thing we could do as a state to take on our land-use challenges."

Budget negotiations in Sacramento may move CEQA from the top of the agenda for the time being, but reformers across the state seem determined not to let it stay there for long.

On Thursday, fifty civic leaders from the Sonoma region got down to the business of supporting business while keeping their eye on quality of life for area residents. Their focus was public-private partnerships to get the job done.

Opening remarks by Sonoma County Supervisor David Rabbitt called for a 360-degree look at infrastructure: transportation, water, waste and access to broadband communication.

"CEQA," he said, "plays an integral role in protecting our economy, but we cannot afford the status quo." He also identified the need to support a strong and capable workforce as the foundation of the Sonoma economy.

David McCuan, professor of political science at Sonoma State University, moderated a panel focused on business and government as partners.

"The state and the feds cannot meet our needs – there are not adequate revenue sources and the competition is tough," said panelist Suzanne Smith, executive director of the Sonoma County Transportation Authority. "It's really about local decision making and local tax measures to help drive the economy."

A healthy economy, she noted, requires effective and efficient movement of goods.

Carolyn Wasem of Kendall-Jackson Winery spoke to the need for businesses to strike a balance between stewardship and economic success. The Kendall-Jackson Winery works closely with federal and state government to navigate the regulatory environment and manage costs. "We cannot achieve our collective goals alone," Wasem remarked.

Panelists and the audience engaged in dialogue about the value of enterprise zones, redevelopment funds and business recruitment. "Private business just wants the government to stretch a bit and meet them halfway," said Paul Yoder of Shaw/Yoder/Antwih, Inc.

"Companies go where they want and they stay where they are appreciated," noted Doug Henton of Collaborative Economics.

The audience then dived into identifying their regional priorities for the 2013 California Economic Summit using live audience polling. The conversation was supported by detailed analysis of progress on the 2012, Signature Initiatives outlined in the Briefing Book prepared for the forum.

Responsiveness to the needs of local employers (with 28 percent of the vote) was the highest priority for workforce development. Nearly half (42 percent) of participants identified transportation as the most critical infrastructure need. Regulatory modernization was also a top priority, with two-thirds of participants indicating a desire to reduce CEQA uncertainly, shorten permit processing time and help small businesses innovate.

Ben Stone, director of the Sonoma County Economic Development Board and host of the forum, encouraged all participants to attend the 2013 California Economic Summit in Los Angeles on November 7-8, to continue to advance their important regional priorities.

(Photo Credit: El Frito)

Cheers to you, San Francisco small business owners! It’s San Francisco Small Business Week, an annual event celebrating the vital economic contributions of the city’s more than 85,000 small businesses and entrepreneurs.

Proving he knows how to get a party started, San Francisco Mayor Edwin Lee kicked off this year’s festivities by announcing the creation of a loan program with $12 million available to lend to local small businesses.

“The Emerging Business Loan Fund will allow entrepreneurs and small businesses to secure the capital they need to innovate, grow their business and succeed,” said Mayor Lee.

By expanding financing opportunities for small businesses the new Emerging Business Loan Fund (EBLF) program aims to stimulate the local economy and fuel job creation.

Despite being a startup-friendly city, limited access to capital remains a large barrier faced by entrepreneurs across the state trying to kick-start and grow a business. Access to a steady and affordable stream of financial capital is a key decider in small business success. However, funding streams have dried up as compliance with stricter lending standards resulting from the economic downturn triggered banks to pull back from making small business loans.

In an effort to fill this lending gap, San Francisco’s new loan product creates an alternative funding pathway for entrepreneurs and small business owners left out of the traditional credit market.

To promote real job creation, the program prioritizes lending to nascent industries that have the potential to create employment opportunities for the city’s moderate to low-income population, such as apparel manufacturing.

Qualified businesses can apply for a loan ranging from $50,000 to $1 million to cover operational, staffing, equipment, expansion, and real estate costs.

“Based on recent demand from San Francisco businesses for this loan product, we know there is significant unmet need for flexible financing,” said Jacob Singer, Bay Area Small Business Finance CEO, the non-profit, community-based lender tapped to administer the program. “Our partnership with the City will enable us to get more loans funded that otherwise would not be financed.”

San Francisco created the loan program buy using existing funding from the Small Business Administration and the Department of Housing and Urban Development’s Section 108 program.

A robust small business sector is vital to the strength of any economy, but the health of small business depends on the availability of a reliable flow capital. Removing obstacles to obtaining financial capital, as San Francisco has done, will spur small business growth and reinvigorate the California economy. 

The Bay Area certainly has its strengths, with a technology-driven economy that produces the highest GDP per capita in the nation, attracts nearly half of all U.S. venture capital spending, and supports a workforce that is one of the country's most highly educated.

But regional leaders at an economic development forum in San Francisco on Wednesday were eager to find a way around the obstacles standing in the way of the Bay Area's future growth: A housing boom that is squeezing middle-income workers, employment rates that continue to stagnate at 1997 levels, and a labor force that may be falling out of sync with the region's needs.

"There is something going on in the Bay Area today—a focused effort to bring our resources to bear on these challenges," said Sean Randolph, president of the Bay Area Council Economic Institute at the San Francisco forum, one of sixteen regional meetings being held around the state leading up to the 2013 California Economic Summit in Los Angeles this November. "I can't remember a time in the last twenty years when had this seriousness of a conversation about our region's priorities."

Participants at the forum identified several areas of focus for the region—including investing in workforce development and streamlining state regulations (most notably CEQA, a subject the Summit has been covering closely).

But it was infrastructure, in particular, that emerged as the region's top priority.

Infrastructure means affordability

"When you talk to elected officials in Sacramento about infrastructure spending, you can see their eyes glaze over. But this isn't just about goods movement or connecting workers with their jobs—it's about making the Bay Area more affordable," said Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association (SPUR), a group that promotes long-term planning and sustainable infill development.

"If we can invest in transportation systems and transit, and we can get people down from two cars to one, we'll allow a lot more people to live here. We'll all benefit from that."

Finding a way to pay for these needed infrastructure investments—estimated at $765 billion over the next 10 years for all of California—has proved difficult. Metcalf, for one, offered a short-term solution: "Updating CEQA is probably the single free-est thing we could do as a state to take on our land-use challenges."

José Luis Moscovich, the former director of the San Francisco Transportation Authority, made a convincing case for a long-term approach: Leveraging public-private partnerships to make the region's goals a reality.

"Being able to deliver things on time and on budget is something we've been talking about for years; it's hard for government to build trust without doing that," said Moscovich. "Our ability to get things done increases dramatically when the private sector engages."

Moscovich spearheaded the development of San Francisco's Presidio Parkway, a $1 billion public-private partnership to revamp the 70-year-old approach to the Golden Gate Bridge—a project that successfully brought together European investors with American construction and maintenance crews (and taxpayers).

He highlighted research showing the high costs—and cost overruns—of traditional infrastructure projects (funded by bond sales and built by the lowest-bidder).

Moscovich pointed to CalTrans data showing overruns in most of its projects costing more than about $50 million—the price of building a freeway interchange. Mega-projects with price tags over $300 million or more, meanwhile, cost tens of millions more than expected roughly 60 percent of the time.

Building up the state's expertise in using public-private partnerships to fund infrastructure is a top action item identified in one of the seven Signature Initiatives to emerge from last year's Economic Summit. With the state continuing to lack the resources to meet its infrastructure needs, alternative financing options have been a frequent topic of discussion at other regional forums, as well.

"I find it exciting to hear talk about blending economic development and really big-picture planning," Moscovich said.

Scaling up statewide

In agreement was Kish Rajan, the director of the Governor's Office of Business and Economic Development (GO-Biz), who recently attended regional forums in Orange County, the San Joaquin Valley, and the Sierras—and who noted how much the state's regional priorities match up with the governor's.

"Gov. Brown is determined to shake things up in Sacramento," said Rajan. "This is a great opportunity for me to hear from you, and to listen to your ideas as we develop a set of shared priorities across the state."

What could Rajan's office be able to do to make these goals a reality? "First, where government is in the way, we should get it out of the way," Rajan said, mentioning the state's complex regulatory system, in particular. "What government can do is invest in infrastructure and education, and make sure our fiscal house is in better order."

Bay Area leaders clearly share this same goal—and are already finding ways to work better as a region. John Gioia, a member of the Contra Costa County board of supervisors, provided an update about his work as chairman of the Joint Policy Committee, a group working to coordinate the planning efforts of the region's four planning agencies.

"We all need to stop competing among ourselves in the Bay Area," said Gioia. Instead, the region must integrate efforts to address the land-use and housing challenges that could stunt the Bay Area's growth.

"We are one region," said Gioia, "And we're going to sink or swim together."

Policy priorities for the state

After outlining their top priorities for the region, participants identified a range of policy proposals they thought would help the Bay Area take on these challenges. They included:

Infrastructure:

• Lowering vote threshold to 55 percent (from the current 2/3rds) for infrastructure projects
• Developing a comprehensive state infrastructure plan
• Modernizing the state's water system

Workforce:

• Preparing more students for careers in STEM fields (science, technology, engineering, math)
• Integrating community colleges with regional industry sectors

Regulations:

• Modernizing CEQA, the state's 40-year-old environmental law
• Streamlining regulations

Opinion poll after opinion poll tells the same story. Issue Number One for Californians is the economy and job creation. And in California our economy is improving, slowly, and unemployment is coming down, slowly.

One sector that is beginning to recover is manufacturing which, along with our housing industry, has taken a beating in recent years.

So when Governor Brown, during his May budget revision speech this week, proposed the addition of a statewide sales tax exemption on the purchase of manufacturing equipment, he received quick and warm praise from the California Manufacturers and Technology Association.

"We congratulate Governor Brown on a proposed balanced budget that will help California provide important government services," said Jack Stewart, President of the CMTA. "It is critical that we rebuild our middle class and grow high-wage manufacturing jobs."

To give you an idea of how California's manufacturing sector lags the nation, Stewart's group reports that manufacturing investments are weak. In the past six years, we have 6.8 new or expanded facilities for every one million people. The rest of the country averaged eight times that.

And focusing on support of manufacturing is something of a no-brainer for bolstering the middle class as manufacturing jobs can make an average of 39 percent more than the overall California average wage.

California still has almost 1.8 million people unemployed that could benefit from a growing manufacturing sector. It is the issue of job creation and improving California's ability to compete with other states and countries economically that is the focus of the California Economic Summit.

Sixteen regional meetings are being held across the state so that local business and civic leaders can talk about how to improve their local economies. Issues like increasing investment in infrastructure, workforce development and easing the regulatory environment are being discussed and prioritized at each meeting.

The results will be brought to the California Economic Summit in November where local and state leaders will gather in Los Angeles to review and revise the signature initiatives that have been developed to improve the state's economy. (See them here)

In the meantime, Stewart and his group are positive about this week's news from the Governor.

"We look forward to working with the Governor to develop a plan to bring back manufacturing jobs and other middle class employment to grow our economy and ensure healthy state revenues in the future," said Stewart.

As California continues to work on fixing the top priority and creating more middle class jobs in California, the improvement in the manufacturing sector is a must.

"This is not the time to break out the champagne...it's a call for prudence, not exuberance," said Brown.

Speaking at the presentation of his revised state budget, Brown called the budget "solid" but acknowledged the next 14 months are a bit of an uncertainty. It seems Brown thinks California should invest in the long term by bolstering education yet that it must also stay frugal, since the state's economic recovery and revenue are under some pressure right now.

As California Forward's Jim Mayer opined last week about a recent revenue windfall, "Lawmakers should treat the $4.5 billion as “one time” money, as opposed to a permanent growth in revenue. Why? Because that’s probably what it is."

Citing floundering economies abroad and pressures coming out of Washington, Brown gave reporters the reasoning behind a recent state economic projection showing a slowdown.

"The news about the economy has dropped," said Brown. "Four percent growth has become two percent growth. The people who put this budget together in January didn't anticipate the sequester and didn't anticipate the payroll tax restoration. Both of those have hit our economy."

The best way to increase state revenues in the long term, of course, is to create more middle class jobs. The Governor understands that as well as anyone. And given the complexity of California's economy, which is a really a series of regional economies, California Forward and the California Stewardship Network have been gathering local leaders and business people in 16 different regions around the state to discuss what needs to happen in order to increase jobs and improve the state's ability to compete in a global economy.

The intel gathered at the regional meetings will be shared at the California Economic Summit in Los Angeles in November. At many of those meetings has been the Governor's own head of Business and Economic Development, Kish Rajan, who has been listening to these local leaders talk about the need for regulatory reform, better workforce preparation and infrastructure investment.

"Working with regional leaders, Kish Rajan and others who have the goal of creating more middle class jobs for California is the very heart of our work," said Susan Lovenburg, who leads the Economic Summit for California Forward.

The budget does include some notables for those doing business in California. The new-jobs hiring credit and the sales tax exemption for manufacturing were called by Robert Lapsley, President of the California Business Roundtable, a critical first step to keeping businesses here and attracting new ones.

"The California Business Roundtable commends the Governor for his prudent and balanced May revision of the proposed state budget," said Lapsley in a statement reacting to Brown's revision. "We believe it is the right course given the current and projected state of California’s economy."

Despite Brown's general tamping down of expectations, the budget's boost to education with Prop 30 revenue looks like an important long-term bet when it comes to prepping a better workforce.

For higher education, the budget shows CSU spending will be up $1,953 per student and UC spending up $2,491 per student. And K-12 spending will increase by $2,754 per student through 2016-17.

Acknowledging a cycle of boom and bust in California, Brown pressed the notion that this budget represented something different from past plans.

"But it's one that unlike those of the past is going to be very prudent because we're sailing into rather some uncertain times."

If it's one thing that business doesn't need, it's uncertainty. But Californians working around the state at the regional economic forums look to combat some of the problems of doing business here. 

Governor Brown's economic development leader had a clear message for participants of the 2013 Gold Country Prosperity Summit in Loomis on Monday.

"It is important that those who govern in Sacramento understand that California is not one monolithic economy. It is a series regional economies, each with its own strengths, challenges and opportunities. I understand that. Governor Brown understands that. And he's leading the economic development effort in this state."

Kish Rajan, executive director of the Governor's Office of Business and Economic Development (GO-Biz), joined more than 125 participants of the Prosperity Summit who came together to set priorities for local and state action to create jobs and boost quality of life. The Sierra Nevada event, hosted by the Sierra Business Council, is one of sixteen regional forums being held around the state leading up the 2013 California Economic Summit in Los Angeles this November.

Sierra business and civic leaders are motivated to improve their region's economy, which, as rural economies have historically done, is lagging behind the recovery of urban areas.

While per capita income in the Sierra is improving, at $35,148 it still trails the state average of $44,550.

The region also faces 13 percent unemployment, as shown in the Prosperity Summit's Briefing Book which provided some background on the state of the local economy.

Attendees worked on setting some regional priorities to tackle issues that hinder rural economies, like less access to capital and broadband, and also to promote the economic strengths of the region such as its natural resources which are estimated to produce $2.2 billion for the California economy.

The group zeroed in on four key areas: accessing community capital, alternative energy and conservation, sustainable business planning and practices and strengthening the local economy.

So what are the priorities?

• Better leverage existing assets and resources locally

• Improve transportation and broadband connectivity

• Launch a regional capital collaborative to invest locally

• Advance a working landscapes initiative at the California Economic Summit so that urban regions understand the direct benefit of good stewardship of rural lands

• Educate businesses on the benefits of sustainable practices

• Benchmark and monitor progress of sustainable initiatives

• Join voices for better and stronger advocacy

Participants also expressed a continuing interest streamlining the permitting process and reforming CEQA, both signature initiatives of the 2012 Summit.

"What a home run you all hit getting the attention of state policy leaders on this issue," said Rajan. He indicated his office will take the lead on regulatory reform, as the Governor and the Legislature grapple with modernizing CEQA. (Read CAeconomy coverage of the CEQA modernization debate here.)

Jeff Bordelon of Placer Sustain, summed up the stewardship mission of the day: "It's time to step forward and take responsibility for our future. There is no need to wait for funding, authority, sanction or whatever. There is much we can accomplish with the resources we have at hand. We can integrate our values into our economic development. It's time to start now."

Video and event materials can be seen on the Placer Sustain website.

Orange County's economic reputation speaks for itself. (Photo Credit: TangoPango)

When what one leader calls "a very economically savvy region" gets together to discuss the economy, it is wise for the rest of the state to listen.

So when Orange County held its Regional Economic Forum and repeated themes heard elsewhere around the state, you begin to pick up some important cues.

California must improve its transportation infrastructure and in how it prepares its workforce if the state is to attract more business and create jobs.

"It is taking us 6 to 12 months and 500 miles to hire competent people who can do the needed work," said Frank Ury of Hitachi Data Systems. "We need to be preparing our workforce for these opportunities."

The Forum, sponsored by the Orange County Business Council, was held as part of 16 regional conversations being held around the state in advance of the California Economic Summit scheduled for November 7-8 in Los Angeles.

The ongoing theme of workforce preparation--one of the Summit's seven Signature Initiatives--continues to percolate around the state.

Ury, who also serves as Mission Viejo's mayor, said that the region's workforce needs to be better balanced in order to attract workers from Orange County for jobs in Orange County.

International trade is a key element of the Orange County, representing 13 percent of the total economy and a robust $25 billion each year.

Another statistic that jumps out is what international trade means to job creation. The average salary of a job related to international trade is $75,000 a year, compared to $52,000, the average Orange County salary now.

"Exporting is easy. The hard part is the manufacturing climate in California, along with transportation and workforce development," said Michael Snow, President of SnowPure, a San Clemente industrial water technology company.

Snow called Los Angeles International Airport a second class airport and said that Shanghai, Tokyo and Beijing are worthy of comparison of what a 21st century airport should look like.

Another panelist also used Asia as a model, this time when talking about preparing the state's workforce.

"China, South Korea and other nations have pulled ahead of California schools," said Noel Massie, President of UPS' Southern California District.

Massie noted that San Diego's healthcare cluster and Silicon Valley's tech economy grew from the University of California and called for a limit on out-of-state students at UC campuses, noting that 25 percent of the students at top UC schools are coming from other states and countries.

Also attending the Forum was Kish Rajan, Governor Brown's energetic head of GO-Biz" which is working to retain business in the state and improve the climate for job creation.

One area for improvement that is receiving a lot of attention around the state is the regulatory climate in California. Rajan says the state can do better.

"California will always care about consumers, public health, environment and its workers. It's our culture, who we are," said Rajan. "But we do not need to tolerate a regulatory climate like the one we have that is so much in our way."

The meeting seemed to achieve the beginnings of what the respected leader of Orange County Business Council said she had hoped to achieve.

"This year we will review progress, and refine, tweak and add to that economic strategy to further secure our place as a very economically savvy region," said Lucy Dunn.

When you think of Ventura County nestled between bustling Los Angeles and expensive Santa Barbara, you think of one thing---a good quality of life. It's not like the rest of most of California and its economy reflects that diversity.

So when around 100 local economic leaders met in a Regional Forum to discuss their regional priorities for increasing jobs, it had a unique feel.

"Our region is crazily pro-business and crazily quality of life," said Bruce Stenslie, president of the Economic Development Collaborative of Ventura County.

He pointed out that Ventura County assets also include financial stability, a diverse economic base, good education and attractive price points.

This Regional Forum is one of 16 happening around California is preparation for the California Economic Summit this November.

As the Ventura County leaders voted on what was important to helping their local economy, there were some familiar themes echoed from similar meetings around the state.

They said that workforce development is very important, and that the top priority should be increasing investment in career technical education in high demand fields.

"We need to ask ourselves how to deliver jobs and training for success in higher paying jobs," said Sharon Dwyer of the Ventura County Civic Alliance (VCCA).

On the topic of infrastructure, they were very clear on their top priority. Nearly half (45 percent) said that the modernization of California's water infrastructure to ensure a reliable water supply was the top priority.

Part of that concern is because agriculture is a $2 billion part of the Ventura County economy. (For a full analysis of the economy, here's the link to the VCCA State of the Region Report)

In the area of regulatory reform, which is a key issue for many people in economic development, the vote was again fairly straightforward. A third of those present said modernizing the California Environment Quality Act (CEQA) was a top priority while 29 percent said encouraging local government to streamline their regulations was tops.

Manufacturing will be an area of to target for growth, and in Ventura County that means small manufacturing firms. There are 550 manufacturing firms with less than 10 employees.

"We are a national leader in industry diversity, we have a thriving manufacturing export economy, robust agriculture, and state lead in oil production," said Stenslie, who also pointed out that defense spending is a significant if under-publicized part of the economy.

That's why, when asked for other factors that are important to the economy, participants voted for better promoting their export economy and protecting and expanding their defense industry business.

The theme of quality of life is important and was reinforced many times. The forum's Briefing Book noted that folks in Ventura County drive less than most other people in California.

And when they drive they can head to the great nearby beaches, golf courses and recreation opportunities that dot the county. (Writer's note--I can personally vouch for the quality of the golf courses and often travel from Los Angeles to play these courses which are superior to the public courses in Los Angeles)

This is the second set of regional meetings being held around California in the last two years. Last year, Ventura County didn't have its own regional meeting in the series. But as Summit leaders realized the distinct nature of the local economy, it was apparent that Ventura County needed its own meeting.

"That's what we are trying to do in the Summit process," said Susan Lovenburg who coordinates the Summit for California Forward. "Our state's economy is made up of regional economies that often have distinct difference as well as many similarities. This is true of Ventura County and the meeting reflected that uniqueness."

The Regional Forum process will continue around the state until early in June, when results will be consolidated into agenda items for the Summit. There are currently seven Signature Initiatives that have been agreed upon that will help increase job creation and improve the state's ability to compete in a global economy.

The Summit process is being led by California Forward and the California Stewardship Network.

Steinberg's proposals have drawn a mixed reaction from environmental groups. (Photo: flatworldsedge)

With much of the state turning its attention to the governor's soon-to-be-announced budget, CEQA relinquished the political spotlight this week—but only temporarily, as negotiations continue over how to improve the state's 40-year-old environmental law without taking away its vital role in protecting the environment.

Nineteen CEQA bills ultimately emerged from the last week's committee hearings (out of 28 bills originally introduced), including Sen. Darrell Steinberg's high-profile reform proposal and a host of other updates supported by environmentalists. Sen. Tom Berryhill's more comprehensive effort to overhaul the law was decisively defeated.

Much of the focus remains on Steinberg's proposal, which aims to speed up the CEQA process for infill development. (See our summary of what's in the bill.) "What are the other games in town when it comes to CEQA," Steinberg asked after his bill unanimously passed out of committee with the support of business, environmental, and labor groups.

"I think it was noteworthy that we had stakeholders who are usually at great odds on these issues all coming forward to say while there's more work to do, they want to engage in this process and are okay with the elements of this bill," Steinberg said. "I think I'm in a good position here to get things done."

How Steinberg's doing: The early reviews

As stakeholders returned to the negotiating table this week, the first reviews of Steinberg's legislation began to appear. Steinberg has said his goal is to find the "elusive middle ground" between the environmental and business advocates who have butted heads for decades over the law.

And while the major players involved in negotiations are staying mum about what they hope to see in the final bill, the initial public response seems to show he's on the right track. (Though we've highlighted three key questions that need to be answered before the bill can enjoy widespread support.)

While some environmental groups have pushed back on Steinberg's proposals, other environmentalists feel the bill doesn't go far enough. A handful of conservative newspapers are celebrating Steinberg's effort, while a few liberal papers have done the same.

Five big city mayors, meanwhile—including San Francisco's Ed Lee, Sacramento's Kevin Johnson, and Los Angeles's Antonio Villaraigosa—have joined forces to support the Steinberg-led reform push.

"It's time to update CEQA so that it fulfills its original intent rather than be used as a means of delay or obfuscation," the mayors wrote in a recent op-ed. "There is also great potential when undertaking this modernization to create a statute that incentivizes local governments to do the right thing—especially when it comes to infill development and transportation infrastructure projects in an urban setting."

Keeping the parts that work

As Steinberg juggles this diverse reform coalition, there seems to be widespread agreement that his approach wisely holds onto the parts of CEQA that work best. In a Capitol Weekly story, Ken Alex, the director of the governor's Office of Planning and Research, offered the first substantive comments from the administration about its views on the law. (To date, the governor's comments about CEQA have been largely metaphorical.)

"At its core, CEQA demands that state and local agencies identify the major environmental impact of actions they are proposing to take and either avoid or mitigate those impacts. That's the part that's working," Alex said this week. "Californians take for granted that whenever a government entity makes a decision, it has to think about the environmental consequences, and the public has a right to participate in the process."

What the debate is really about

Ensuring that vital role isn't taken away remains the goal of the environmental and labor coalition that has opposed recent efforts to overhaul the law over the last year. The business and housing groups pushing for reform, it's worth noting, continue to say much the same thing.

Both groups used this week to push out studies that make their case for how best to accomplish this. The CEQA Works coalition highlighted two recent environmental lawsuits that led to the protection of farmland in the Bay Area and pushed cities like Stockton to create plans to address poor air quality.

The reform-minded CEQA Working Group, meanwhile, released a case study featuring a long-delayed affordable housing development in San Francisco's Lake Merced neighborhood, which a CEQA lawsuit has put on hold since 2011, in spite of the project's emphasis on transit-oriented development.

Stories of CEQA abuse elsewhere in the state, meanwhile, underscored the reform effort's high stakes. The city of San Jose was hit with a CEQA suit from an aviation business that lost out on a bid to operate a private airport used by Google execs. A Slate column blamed CEQA for the lack of an infill development boom in Silicon Valley—which the author blames for rising prices that are pushing residents out of their neighborhoods. A leaked settlement agreement in Los Angeles, meanwhile, provides hard evidence of the practice of "greenmailing," where lawyers use CEQA lawsuits that have little to do with the environment to solicit cash payouts from developers.

How much will lawmakers tackle?

Sen. Steinberg is aiming to thread this needle—to maintain the parts of the law that will continue to allow communities to preserve farmland and improve air quality, while raising the thresholds for lawsuits targeting infill projects that don't have anything to do with the environment.

In its current form, Steinberg's bill would eliminate some abuses of the law, but certainly not all of them. Its focus on environmental issues like aesthetics, traffic, and parking, for example, would have little impact on lawsuits like the one aimed at the Google airport or the latest "greenmailing" case in Los Angeles.

Are these issues widespread enough to be worth a legislative solution? Or is Steinberg's narrower focus appropriate, given the many interests he's continuing to juggle? That is likely to continue to be a source of debate in the weeks to come. 

The future growth of any economy hinges on the availability of a robust pipeline of well-educated young workers to replenish and revitalize an aging workforce. As the baby boomer generation retires, California's economic health will depend on the capability of the state's youth, the majority of who are Latino, to plug the holes created in the workforce. Making sure young Latinos get the skills and education required to replace exiting workers is vital to California's economic strength and sustainability.

"The states future economic outcomes and prosperity are really centered on our success with our young people and with Latinos in particular," said Max Espinoza, senior advisor on higher education to Assembly Speaker John A. Pérez, at a recent event organized by Hispanas Organized for Political Equality (HOPE), a nonpartisan organization dedicated to the political and economic advancement of Latinas.

But California's rapidly changing demographics is a double-edged sword.

Given the youthfulness of California's Latino community, while other states struggle with aging populations, California's workforce will remain one of the youngest in the nation as Latinos constitute an increasingly larger percentage of the working-age population. However, the level of educational attainment among Latinos remains well below that of their peers and the state's retirees, leaving many ill-equipped to succeed in California's knowledge economy.

Knowledge-based industries, which require at least a bachelor's degree to enter, comprise a growing share of the state's economy. But while nearly half of California's college-age population (18-24) are Latino, less than 10 percent of Latinos older than 25 have graduated from a university. 

As a result, California faces an estimated shortage of one million college educated workers by the year 2025.

"Given the demographics of the state," said Espinoza, "higher education is critical for Latinas and Latinos. It's really important that we ensure they have equal access to higher education and that they have success while in higher education so they graduate."

There is no ambiguity about which issue is most important to Californians. Creating jobs and improving the state's economy tops the list.

It's not close and it's not partisan.

Democrats, Republicans and "decline-to-states" agree overwhelmingly. More than 36 percent of Californians say "Jobs/Economy" is the most important issue facing California. The subject of the state budget and deficit was a distant second at 18 percent and education was third at 10.5 percent

Those are the results of a poll released by the California Business Roundtable and the Pepperdine University School of Public Policy.

What is more partisan is whether you think the economy is improving.

If you're a Democrat, you're way more likely to think it's getting better than if you are a Republican by a margin of 42-to-13 percent

The poll, which is the first of several that will explore how major state issues impact the California economy, took a look at the energy issue. It is generally accepted that Californians want to replace the high-value jobs lost over the decade, and the poll indicates that more energy exploration might be OK with them as a way to do that.

"Californians in general are still worried about the economy," said Dr. Michael Shires of Pepperdine University's School of Public Policy. "They want energy prices lower and more jobs created and say they are willing to be flexible in order to achieve those goals."

It's that flexibility in the polling results that captures one's attention.

The poll shows that Californians support taxing oil and natural gas extraction in the state to help pay for education, safety and social service programs by nearly double (49 percent-to-28 percent). We may get a chance to vote on the severance tax next year.

California's attitude toward energy exploration may be changing, as a majority those surveyed in this poll were in favor of expanding exploring for oil and gas here.

"What was very revealing was that Californians seem to indicate they are willing to be flexible with environmental regulations to extract the oil and gas, if it means that the price of gasoline would decrease and the number of jobs would increase," observed Dr. Shires.

Most Californians polled said they would be willing to ease environmental regulations (50-to-28 percent). The desire to balance lowering their energy prices and improving the economy while still promoting a "green" economy is evident in the poll results.

When asked if green energy policies had a negative or positive impact on the state, a plurality said "positive" at 47.5 percent. And a vast majority said the state should increase usage of solar energy (76.5 percent), but decreasing usage of coal energy got the most votes at 41.6 percent.

Republicans are much more prone than Democrats (63 percent to 43 percent) to supporting making it easier to extract oil and gas. What was interesting is that the traditionally Democratic demographic of Latinos seem to break with their party on this issue where 54 percent of Latinos polled indicated they ease regulations for lower gas prices and more jobs.

We Californians will be hearing more about the Monterey Shale formation, located in Central California and thought to harbor an abundance of oil. The poll question about oil exploration sets things up by saying proponents argue developing the shale could create a half-million jobs by 2015, while opponents say they are still concerned about the environmental impacts of fracking.

That said, support for developing the Monterey Shale was 46 percent compared to 29 percent opposed.

The argument about energy development and taxing that development in California may be ready to heat up again.

If you ask any Californian living outside of the Central Valley why is water important, some will probably say water is important for drinking, for bathing, for washing our hands and watering our lawns.

Water takes on a whole different meaning if you ask anyone living in the San Joaquin Valley, as water helps drive the region's main industry, agriculture.

There's no doubt about it, our state needs to better manage its water resources. We talked to leaders at the recent San Joaquin Valley Regional Economic Forum about what water means to their local economy.

At the second annual San Joaquin Valley regional economic forum, water again became a main topic of discussion amongst business folks, farmers, educators and economists.

That's why the California Economic Summit, has also made it a priority to address this concern. In this case, Action Teams are talking about and working on the building and maintenance of water infrastructure, as one of the Signature Initiatives for fixing the economy of this state.

It's also a a critical time for water issues, with Governor Jerry Brown's Sacramento Delta tunnel plan and state water bond front and center in the discussion.

"His attention to the issue has triggered multiple conversations across the State, and we should all be encouraged that, influenced in part by the 'water modernization' proposal presented at the 2012 California Economic Summit, the conversations are becoming increasingly more constructive and encouraging," said Pete Weber of Fresno, a businessman who also serves on the Leadership Council for California Forward.

"Californians have fought water wars for generations, pitting regions and interest groups against each other," added Weber. "But there's a new tone developing--a recognition that the near-term and long-term solutions have to address the needs of environmental, urban, agricultural and industrial users as well as the needs of every region." 

For one day this week, at least, all of the major players in the CEQA debate seemed to be on the same page: Which is to say, directly behind Senate President pro Tem Darrell Steinberg.

After several months of public squabbling over how to change the state’s premier environmental law, Steinberg made his pitch for his CEQA reform bill to the Senate’s environmental quality committee—and the line of people testifying in support went almost out of the committee room’s door.

“People on all sides are serious about this,” Steinberg told the committee. “I’ve come to the conclusion that CEQA doesn’t need to be fundamentally rewritten, but it needs to be updated. There are parts of the law that ought to be changed.”

Real disagreements still exist over how best to proceed (more below on where the debate seems headed), but on Wednesday, Steinberg was flanked by leaders of the business coalition supporting reform and environmental groups that have opposed overhauling the law. Queued up behind him were advocates from the newly-formed public works coalition—the public agencies responsible for implementing CEQA—as well as a range of affordable housing groups, alternative energy producers, and city planners.

What everyone agrees on

All seemed to agree on one thing: Steinberg’s SB 731 is a good-faith effort to reform the state’s more than 40-year-old environmental law.

Even labor leaders, who have publicly warned against tampering with CEQA, joined the chorus of support for Steinberg. "There are elements within the bill that stretch our comfort levels,” said Scott Wetch, a lobbyist for the California State Pipe Trades Council and other construction trades unions. "But we are really interested in having a piece of legislation that addresses some things that need to be fixed and puts an end to this ongoing nonstop assault on CEQA.”

After an hour of testimony, the committee unanimously voted to move Steinberg’s bill forward—and decisively voted against the more comprehensive reform attempt introduced by Sen. Tom Berryhill.

Sen. Hannah-Beth Jackson, one of the committee’s longtime environmental champions, summed up the mood in the room in her parting remarks to Steinberg: “I appreciate you taking the tiger by the tail, and God bless you for doing this.”

Now comes the hard part

With a floor vote still months away—and with the major stakeholders clearly making an effort to stay at the negotiating table—the real debate over CEQA now begins.

Committee hearings are often more about political theater than policy substance, and this week’s was no exception. Sen. Jerry Hill, the Silicon Valley Democrat who serves as the committee’s chairman—and who may be a good barometer of how Dems will balance the interests of business and environmental groups—didn’t comment at all during the hearing.

While speakers may have prefaced their remarks with supportive statements, there were certainly signs of lingering disagreements over how to proceed. As Steinberg himself acknowledged: “A lot of people on both sides don’t like [parts of] what’s in this bill."

A few of the most notable glimmers of potential opposition:

• Business – “While we recognize we have a long ways to go to achieve meaningful modernization, we believe SB 731 is an important step forward,” said Gary Toebben, co-chair of the reform-minded CEQA Working Group and president and CEO of the Los Angeles Area Chamber of Commerce.

• Environmentalists – “CLCV [the California League of Conservation Voters] has long opposed amendments that weaken CEQA’s central elements. We also disagree that sweeping or structural reforms are warranted,” said Rick Zbur, chairman of the CLCV board. “Overall and on balance, we support moving ahead at this time because it works within CEQA’s existing framework and because of its potential benefit for smart infill growth.”

• Labor – “At this time, we’re not opposing this bill, but we’re not supporting it either,” said Robbie Hunter, president of the State Building and Construction Trades Council of California. “We do have confidence in the leadership of Sen. Steinberg…[but] we do have concerns it will lead to wholesale deregulation. We hope it will move forward so it can be streamlined and more efficient.”

Where the bones of contention are

As negotiations begin, there appear to be at least two major areas stakeholders will need to find agreement on for the bill to gain widespread support. (For our summary of the bill, click here.)

1. Thresholds: At the hearing, Steinberg himself acknowledged that his proposal to create new thresholds for environmental impacts like noise, parking, and traffic will be a tough sell. Though his approach is much narrower than the comprehensive “standards” approach introduced last summer by then-Sen. Michael Rubio—one that was quickly killed by Democrats—Steinberg did admit that, in concept, his new proposal would do much the same thing on a smaller scale:

“While we don’t adopt wholesale the standards approach, and I say this at my own peril, we do adopt parts of [it] in this bill,” Steinberg said, adding that he was committed to addressing complaints from the development community that the law’s current standards for impacts like traffic “levels of service,” for example, are standing in the way of smart transit and infill projects. (More on that here.)

Under his proposal, Steinberg said: “If a project meets the objective traffic level of service standard, there can’t be a lawsuit under CEQA. You can always challenge whether the standard has been met, of course. But not under CEQA.”

Two days after the hearing, some environmental groups were already raising the red flag over this issue. The Planning & Conservation League told members in their weekly newsletter that “concerns about other parts of the bill, including development of thresholds for certain areas of impact and allowing projects to continue while parts of the review are redone, prevent us from supporting it at this time.”

Those standards, it’s worth noting, are not actually set in the bill, which instead directs the Office of Planning & Research to develop guidelines for them by July 2014.

Will environmentalists trust that process? Will it be enough for business groups? And where will those thresholds apply, anyway? The bill currently limits its proposals to infill developments, but committee members showed interest in defining what, exactly, “infill” should really mean. A broader definition could make business groups happy, while a narrow one would be an effective way to render these proposals toothless.

Watch for thresholds to be a major bone of contention in the months to come.

2. Procedural changes: While thresholds seem likely to be the biggest source of disagreement in the bill, Steinberg’s proposed procedural changes to the law (many of which also appear in six other CEQA bills the committee approved this week) are also likely to be the subject of debate.

Steinberg opened his remarks this week by highlighting his efforts to reduce delays in the legal process—citing in particular his bill’s requirement that public agencies prepare their administrative record as a project goes through approval process, rather than after a lawsuit is filed. “This is estimated to cut the trial court litigation time frame in half,” Steinberg said.

Business groups, though, are still wary of adding new reporting requirements that could further complicate the CEQA process. This week, a group of attorneys at the law firm Perkins Coie outlined some of the potential unintended consequences Steinberg’s streamlining efforts might have. The attorneys say two proposals in particular could potentially create more CEQA lawsuits—not less—by creating new annual “causes of action” that would allow lawsuits to be filed.

Watch for local agencies and business groups to push for clarity on these issues (language is Perkins Coie’s):

• New requirement for annual reporting: “The bill would impose a new requirement that lead agencies prepare an annual report on each approved project’s compliance with required mitigation measures . . . It is not clear whether the requirement to prepare and post the annual report would open up an annual opportunity to file a CEQA suit challenging such a report.”

• Preparation of record for litigation: “It’s often obvious before the lead agency even starts work on the CEQA document that opponents will file a CEQA lawsuit.  In apparent recognition of this fact, the amendment would allow applicants to request that the agency start preparing its ‘record of proceedings at the very beginning of the CEQA process and would require the lead agency to comply with that request for certain types of projects. . . . This may create substantial risk of new causes of action for violations of these newly created procedural requirements, exposing project approvals to even more litigation uncertainty than exists now.”

The San Joaquin Valley is a critical area of California—it’s truly the world’s bread basket with more than 350 crops grown in the state’s central valley.

Because agriculture has been a bright spot for the California economy, finding ways to help the region to continue to thrive and grow was the theme at the second annual regional economic forum held in Fresno recently.

Speakers highlighted successes made since the last forum while pinpointing action items to move forward.

One thing remains the same: what’s good for California’s regional economies is best for California—thriving regions lead to a thriving state.

The approval process has officially been streamlined. (Photo Credit: Daniel*1977)

Claiming the top spot in any competition or survey is incredible. I mean, who doesn’t like to be number one?

Every year, the Chief Executive Magazine comes out with their list of Best/Worst States for Business. For the past two years, 2011-2012, California rounded out the list, coming in dead last. As the business community in California waits for this year’s list, here’s a bit of good news:  Governor Jerry Brown just signed legislation to help businesses get started and hire more quickly.

AB 113, provides $1.6 million to the Secretary of State’s (SOS) Office to process a backlog of business filing that’s grown to more than 100,000 in recent months.

“The sooner Californians can form their businesses, the sooner they can put other Californians to work,” said Governor Brown.

“This is great news,” said Frank Flores, founder and partner of Exacta Media and ReVamp Interactive.

Flores recently filed paperwork for another corporation, MomentM, Inc. Right now, he was told it will take 6-8 weeks to process.

“The faster the Secretary of State can move on getting companies set up, the faster jobs will be created in California. As a proud Southern California employer it is imperative to keep the economy moving in the right direction and this bill will help do that. California needs to remain vigilant in its quest to be pro-business and this is a good step forward,” said Flores.

Secretary of State Debra Bowen blamed the delay on budget cuts imposed by the Legislature as well as the cyclical nature of filings.

“Business owners have many steps along the way to opening their doors, and I want to make filings with the Secretary of State one of the fastest steps in the process,” said Secretary of State Bowen. “Having more resources to make that happen will let companies do what they want to do sooner, which is open and run a business.”

The bill, which is effective immediately, will pay for overtime and temp workers and is expected to reduce wait times to between five to ten days by November of this year.

“Business owners are not politicians, and we don’t have time to get caught up in the bureaucratic nonsense, as this stifles growth and innovation," said Flores. "Time to market is sometimes the difference between winning and losing and this bill will hopefully make an impact."

While we don't know if this bill will affect the state's spot on the CEO magazine list, at least thing's are looking a little bit brighter for small businesses starting up now.

"Make no mistake, this is the heartland of California," said Sunne Wright-McPeak, president and CEO of the California Emerging Technology Fund, in her closing remarks at the second annual regional economic forum for the San Joaquin Valley.

Stewarding the rich assets of the San Joaquin Valley was the theme of this year's forum, which took place in Fresno last week.

The region, which stretches through the great Central Valley from San Joaquin County in the north to Kern County in the south, is home to the nation's most productive agricultural sector, the highest peaks of the Sierra Nevada, and immense ecological diversity.

In an effort to better steward those resources for the region's advantage, the Valley will need to adapt a sustainable economic model guided by productive partnerships.

Industry Clusters

Hosted by the Partnership for the San Joaquin Valley, the forum highlighted the work being done though partnerships to give a boost to the region's industry clusters.

These industry clusters were analyzed and tapped as the Valley's greatest opportunities for growth and prosperity. The region's big sectors include: the agriculture value chain, energy, health and wellness, logistics, manufacturing, water technology, and public sector infrastructure.

According to Mike Dozier, executive director for the Office of Community & Economic Development at Cal State University of Fresno, each of these clusters demonstrates both growth and "leakage," a term used to describe value that is added to regional goods externally, or in other words, missed economic potential.

Capturing the losses from these leakages is where the Valley stands to gain traction and turn its economy around.

"If you don't go up the value chain, you don't create upward mobility for higher wages," said Bill Fulton, keynote speaker and Vice President of Smart Growth America.

Fulton cited the value chain of almonds as an example of such missed opportunity. Almonds are harvested in Fresno then shipped across the world for a variety of value-added processes and eventually shipped back to Fresno where people purchase those high-value products off a grocery shelf. Fulton argued that the region must "retain the value-added processing of food in order to realize regional prosperity."

The Valley has made significant strides in its goal to improve regional economic performance, sustainability, and opportunity for Valley residents, businesses and communities. More detailed information can be found in the Partnership's 2013 Regional Progress Report.

Stewardship

How will the Valley go about closing the gaps to establish a robust blue collar economy? In one word, the answer is stewardship.

Stewardship, as defined by the forum's organizers, is "the careful and responsible management of something entrusted to us. Stewardship requires our collective attention to the economic, environmental, and social dimensions of the region."

Forum speaker, Doug Noll—principal of Noll Associates—described the model of Steward Leadership as the means of achieving meaningful change.

To achieve that change in the three areas of economic development, infrastructure development, and human development, Noll said there needs to be a fourth circle that encompasses the other three. That fourth sphere is dependent upon coordinated leadership, engaged citizens and institutions, and an effective political sector.

Underscoring this model is the need for trust and perseverance. According to Noll, trust must be built through coalitions that embrace the following virtues: high integrity, a lack of power, strategic thinking, and conflict management.

He is helping to apply the model to some complex issues—homelessness, unemployment, mental health, kindergarten readiness, food commons—that are too daunting to resolve through traditional methods.

As for the requirement of perseverance, Noll compared it to the Native American reverence for the buffalo. Whereas cattle would run from the storm and eventually perish, the buffalo would turn their heads into the storm. We survive the storm by facing it. "That is the motto of Stewardship Leadership," he said.

Although Dozier kicked off the San Joaquin Valley's Economic Forum with the quip, "Today's presentation is brought to you by the word 'optimism," there is no doubt that the Valley's path toward progress is marked by stormy skies.

But with the partners guided by a commitment to collaboration and innovation, using the tools of stewardship leadership, and focusing on critical industry clusters of growth, indeed the outlook is optimistic.

65 acres on the Oakland Estuary of SF Bay are ready for development. (Photo Credit: nautical2k)

If you build it, they will come—to the East Bay. That's exactly what Oakland city leaders hope with the Brooklyn Basin project. The development is expected to be a big economic boom for the city and the region. The waterfront development recently received financial backing from a developer and investor from China.

Local developer, Signature Development Group and Beijing-based Zarsion Holdings Group Co. Ltd agreed to co-develop 65 acres on the Oakland Estuary of San Francisco Bay.

"One of the great, unique opportunities of my administration has been to introduce investors form China to the many amazing opportunities for them here in Oakland," said Mayor Jean Quan. "Part of my job is to bring investments to the city and I am pleased to see that a large Chinese real estate developer and investor is smartly putting his money into the Brooklyn Basin master-planned community."

The investor has agreed to write a check for $1.5 billion to turn 65 acres of industrial waterfront property into a thriving district of shops, parkland and high-rise homes.

The project will create 10,000 jobs, 3,100 residential units, 200,000 square feet of retail and commercial space and 30 acres of parkland with a marina for 200 boat slips.

Breaking ground on the project has been more than a decade in the making. Twelve years ago, then Oakland Mayor Jerry Brown and the City Council approved it. In fact, it already had a certified environmental impact report, but it stalled without the financial backing.

"We share in the belief that a community-driven, collaborative approach to development produces the best results. In the more than 10 years since we were awarded the rights to develop Brooklyn Basin, the City and the Port of Oakland have worked side by side with us to deliver on the vision of a thriving, dynamic waterside community-an asset to all of Oakland," said Signature Development Group president, Michael Ghielmetti.

The property, just south of Jack London Square, is not a pretty site. Many call it an eyesore that used to be a shipping terminal, storage facilities and a gravel business.

"When it's done, it's going to have a huge positive impact on the East Bay area and Oakland in particular, because it's going to develop the area that's kind of old and dilapidated and form it into something really valuable," said Kish Rajan, director of the Governor's office of Business and Economic Development.

Governor Jerry Brown announced the deal during his eight-day trip to China to market the Golden State as the place to do business and the place to invest. Not a bad way to kick off the trip.

"This is an exciting time for Oakland and we are pleased to see the largest approved mixed use masterplan in the city getting the financial backing it needs to move forward," said the mayor.

"It is the first of what we hope will be many major investments as the Chinese business community recognizes the wealth of opportunities here in Oakland."

Former U.S. Secretary of Defense Leon Panetta has signed on to serve as Honorary Co-Chair of the California Economic Summit, which will be held November 7-8 in Los Angeles. Mr. Panetta recently stepped down as Secretary of Defense in the Obama Administration. Mr. Panetta will join former Secretary of State George Shultz as honorary co-chairs. Mr. Shultz served in that role last year as well.

Regional meetings are underway around California as regional civic and business leaders gather to discuss their local economies and how state and regional cooperation can improve job creation in their areas. They are reviewing the seven Signature Initiatives that have been the focus of the work of the Summit Action Teams over the last year.

Meetings have been held in San Diego, San Luis Obispo, Fresno and the Inland Empire. Another dozen regional meetings are scheduled between now and June. In addition to reviewing the progress that has been made on the seven Signature Initiatives, regional civic and business leaders are considering whether to add other major initiatives. (Here's the list of the dates and locations of the regional meetings.)

One of those initiatives is the state of California's infrastructure, which some believe has been neglected too long. If you have a minute, take a look at the infrastructure survey on Caeconomy.org and fill it out. We will be sharing results in the near future.

In addition to infrastructure, the other initiatives that have been the focus of attention for Summit Action teams over the past year plus are workforce preparation, innovation for small business, water infrastructure, streamlining the regulatory environment and modernization of the California Environmental Quality Act (CEQA).

In addition to Panetta and Shultz, many other prominent Californians are helping guide the process. Our Summit leadership this year includes Laura Tyson, the S.K. and Angela Chan Chair in Global Management at the Haas School of Business at UC Berkeley, Lt. Governor Gavin Newsom, the Governor's senior advisor for Jobs and Development, Michael Rossi, Fresno Mayor Ashley Swearengin, Ashley Boren, executive director for Sustainable Conservation, and Dave Regan, President, SEIU-United Healthcare Workers West.

The economy in the state has been steadily improving (although too slowly for some Californians). This recent report by the Federal Reserve Bank of California provides for some interesting reading. California's job growth over the past year has been outperforming the rest of the country.

(Photo Credit: Department of Defense)

The veterans who assisted LAHSA in its homeless count are on the lookout for permanent work. (Photo: Breezy Baldwin)

When 62-year-old David Smedley and 27-year-old Roberto Hernandez clocked in to work at 7:30 in the morning this past winter, they did so knowing that their entire day would be spent searching the streets for homeless people. It wasn't glamorous work, but for Hernandez, Smedley, and 23 other veterans, it was a major step in their efforts to shed their own homeless label.

While all 25 veterans from U.S. VETS who worked on a homeless survey for the Los Angeles Homeless Services Authority (LAHSA) came with a unique back-story about how they went from the military to the streets, the one thing they all have in common is the burning desire to find employment now. And LAHSA is doing everything it can to help them with that search.

"They're looking for pretty much anything – they all want to work," Senior Policy and Planning Analyst at LAHSA Lisa Snyder said. "It doesn't matter what." 

For Snyder and the rest of LAHSA, the veterans quickly proved themselves with their military-honed promptness and willingness to do anything.

"Being in the military, everything has to be done at a certain time," Hernandez said. "We had to get up early to catch the train to be there by 7:30. So I'd be up at 6 in the morning. We got to the LAHSA building at 7:30 everyday, went out, hit the pavement hard, and tried to find as many people as we could. Being in the military helped us out a lot."

Hernandez was born at County/USC hospital in Los Angeles, and at 22 he joined the Navy. After spending the next four years in Japan, he reentered civilian life without a permanent place to stay and no job prospects to speak of, and he quickly landed in U.S. VETS housing. "I'm at U.S. VETS, so technically it is homeless," he said. "The navy was my first job."

Hernandez says his time on the streets put his military training to work, and he came away from the experience with far more than he came in with.

"I found out things I didn't know about homeless people and these streets, and how you think you're in a bad situation, but there are people out there in a really bad situation," Hernandez said. "For me, it was like, if you approach them, approach them at a certain distance and see if they want to talk, and let them know that you were in the same situation too. I'm on your page. I haven't suffered as much as you, but I'm on the same count."

Smedley had a similar takeaway from his time doing the homeless survey. Born and raised in Colorado, Smedley spent five years in the naval reserve after being drafted during Vietnam, spending three years on active duty aboard the USS Midway.

"Basically, I went through a divorce, an operation, personal things," Smedley said. "Alcoholism has been my downfall, but that's been corrected in the last five years. I ended up homeless two years ago."

Unfortunately for Smedley, and unlike Hernandez, it took a while for Smedley to get into the U.S. VETS program because he just wasn't aware it existed. "I wouldn't have been homeless two years ago if I knew this program existed," he said. "For those coming back from Afghanistan and Iraq, they need to go through programs with counselors. Don't let them out in the street and say, 'Good luck.'"

By spending time on the streets himself, Smedley knew how to go about approaching homeless people.

"First of all, it's 'Would you like to have lunch?'" he said. "If you approached them to say I'm here to do a homeless count, they don't want to be associated with it."

Smedley was on the older end of the group doing the homeless count, but age wasn't a factor when it came to the men finding a rapport with each other.

"They called me the OG," he said, laughing. "I was the oldest. Most of the kids were in their 40s, they were a good group of guys. They listened, and one thing I really did appreciate was they had the same kind of passion I had. Out in the street, we'd give money out of our own pockets."

Hernandez agreed that age wasn't an issue because of their mutual backgrounds. "I think that's a military thing; we all relate," he said. "They talk about how it was for them, in the Navy. They would talk about a certain port in Thailand and things happening back in the 80s. All of us were from different eras, different branches, but whenever we were together, we were all good and on the same page."

As for telling their personal stories about how they ended up homeless, that was spoken about less openly. "We don't really talk about it that much," Hernandez said. "Every now and then you bring it up because you want to relate to someone, you got to be on common ground. Like, what happened to you? When we were doing this thing, that's how I kind of found out."

Should they need to give a reference to an employer, LAHSA would be a good choice, as Snyder came away from the experience with rave reviews. "They showed up here every morning at 7:30 a.m., which means they had to get up at whatever-oh-hundred hour to be here," she said. "They were all here every day on time. They were prepared to do whatever needed to be done."

But preparation and promptness can only get someone so far in California’s rapidly advancing economy. For vets whose primary work experience is in the military, they lack some of the technical know-how that makes them extreme victims of the skills gap that is hamstringing the California economy. Of the veterans of the Afghanistan and Iraq wars, a whopping 205,000 of them across the country are unemployed.

The skills gap is especially glaring when it comes to young veterans who haven’t had the training to do civilian jobs; the 2012 unemployment rate for veterans 18-24 was 20.4 percent, over five percent higher than non-veterans in the same age group. With such dismal employment numbers, it’s no surprise that 13 percent of all homeless adults in the country are veterans.

As for what separates a former veteran that's been on the streets from any other applicant for a position, both Smedley and Hernandez waste no time pondering the question. "Wisdom," Smedley said. "Close to 40 years of wisdom. Work ethic. A lot of kids don't have a work ethic, to just get up in the morning and brush your teeth."

"My biggest trait would be whatever I do, I go at it 100 percent," Hernandez said. "Whatever job you give me, I'm going to complete that before the day is over. If you hire a military guy, you can definitely rely on them. They're going to work hard for you. If I had my own company or whatever, I'd hire a military guy before any other guy."

Smedley attributes the startling rate of homelessness for vetereans to the service itself.

"I think when you're in third world countries…you go through a traumatic thought process in your mind," he said. "I saw a lot of poverty. I think people that have seen poverty, war, death, a lot of different things, that makes a difference. It's hard to fit back into the system."

It's hard, but Smedley, Hernandez, and 23 other veterans are doing everything in their power to get back on track. They just need the opportunity. 

If you or someone you know is interested in hiring or finding out more about these veterans, you can contact U.S VETS representatives here: Katherine Gibbs at 310-864- 5262 or kgibbs@usvetsinc.org and Cherrie Lechuga at 562-200-7318 or clechuga@usvetsinc.org.

The Inland Empire region of California holds the crown as the largest U.S. metro area by size and the fastest growing region by population in California. Yet clearly the big region is racked by some growing pains, still holding onto the highest unemployment rate in the country among metro areas.

How to get the Inland Empire economy to pass into maturity was one theme that ran through at an event held last Friday at the University of Redlands.

"We are a growing region, not a grown region," said Steve PonTell, president of the La Jolla Institute.

More than 100 business and civic leaders attended the Inland Empire Regional Economic Forum, the latest gathering in series of 16 taking place around the state. The goal was to identify local priorities for state action to support the new economy.

The forum's Briefing Book showed attendees what the region was up against as well as where its strengths lie. The Inland Empire unfortunately took a big hit in construction jobs from 2009-2012 (-6 percent) but manufacturing showed some small hope for the region with 2 percent growth.

The inland counties also added around 23,000 jobs in 2012 and is expected to finally see some growth, barring any drag caused by the sequester cuts.

But the unemployment rate still sits well above the national and state averages at around 10.9 percent. So, those are the numbers. What exactly does the region need to make a more impressive comeback?

A big topic at the forum, hosted by the Inland Empire Economic Partnership, was the economic impact of the region's education headaches, such as high drop-out rates, that create a workforce lacking the right skills. Panelists highlighted the need to create more training programs to prepare workers for jobs available now, including manufacturing jobs where salaries are higher than average.

"Forty percent of Hispanics in this region do not have high school diploma," said Tom Flavin of the Coachella Valley Economic Partnership. "How do we make sure everyone is prepared to work?"

Making things worse, of the people who attend the colleges in Inland Empire, most leave for jobs elsewhere, taking their higher-knowledge skills with them. "Seventy-five percent of our graduates leave the region," said PonTell.

On the way out of town, those grads no doubt are driving off on one of the several freeways crisscrossing the region. And they're not alone. Census numbers in 2011 showed less than 2 percent of workers in the area use public transportation to get to their job.

"300,000 vehicles run through the county daily," said Cindy Roth, president and CEO of Greater Riverside Chambers of Commerce. "Infrastructure investment is key to our economy."

Given the role the Inland Empire plays as a logistics and warehousing hub for Southern California, it's no wonder that infrastructure was named a top concern for the region during the forum. When attendees were given the chance to vote on economic priorities, helping to shape a state infrastructure plan was a top vote-getter.

"We have congestion, air pollution and wear-and-tear on our highways," said PonTell. "Infrastructure needs to be viewed as one whole system and the pieces need to be connected."

And there's a huge reason for the region (and the state) to get infrastructure planning right: More industrial buildings are going up in IE than last year. An additional 7.8 million square feet of space is being constructed now, compared to 4.3 million in 2011, according to a CBRE report on the IE industrial market, and that, of course, means more traffic.

Finding ways to pay for needed infrastructure upgrades and maintenance, as well as preparing a skilled workforce that aligns with the jobs out there, are two main initiatives of the Summit and are gaining much attention during the forum voting process.

Priorities identified by regions will establish the agenda for the 2013 California Economic Summit taking place in Los Angeles in November.

One of the biggest infrastructure priorities for attendees of the IE forum was wresting control of Ontario Airport away from Los Angeles World Airports and placing it in local hands. Airlines have cut service to the airport as passenger numbers have dropped. LAWA cites the poor economy for the problems, while Inland Empire groups have blamed poor management for the dip in passenger numbers.

Other top vote-getters in the forum polling included:

• modernizing CEQA
• training programs to support the health care industry
• attracting philanthropic dollars to the region
• ensuring water reliability

Panelists made sure to reinforce the notion that what's good for California's regional economies will be best for California. "Solutions are going to come from the bottom up," said Flavin.

A new area of focus is the Kings arena. (Photo credit: Lyssah)

After a topsy-turvy few months of debate, Sen. Darrell Steinberg introduced the details this week of his much-anticipated CEQA reform bill—saying he had aimed for "that elusive middle ground between those who support fundamentally undermining the statute and those who support the status quo."

With this week's amendments, has Steinberg found that sweet spot?

The Senate leader's bill—which focuses on speeding up the CEQA process for infill and clean energy projects—includes several far-reaching proposals (taking aesthetics out of the CEQA equation for many urban projects, for example) as well as an array of smaller procedural changes that will streamline the environmental planning process.

In its current form, though, it seems unlikely to end what Steinberg calls the "vexatious" abuse of the law. And without more detail, it may also prevent Steinberg from accomplishing another goal: Fast-tracking a new NBA arena in downtown Sacramento.

Environmentalists seem to approve

With the bill headed to its first committee hearing next week—and with a long legislative tug-of-war still to come—no formal statements have yet been made by the environmental and labor coalition that has opposed overhauling CEQA. Bruce Reznik, executive director of the Planning and Conservation League, told the Sacramento Bee he was still going over the bill's details, but he said he was "feeling pretty good about where it's heading."

"I think there's actually quite a bit that we can get behind," Reznik said, citing the bill's array of procedural fixes, in particular, many of which focus on how lead agencies prepare CEQA's administrative record. (These changes also appear in an array of other CEQA bills supported by environmental groups.)

Business leaders: 'Meh'

The reform-minded CEQA Working Group released a lukewarm statement about Steinberg's proposals. Working Group co-chair Carl Guardino, president and CEO of the Silicon Valley Leadership Group, described the bill's amended language as "a step forward."

But co-chair Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce, was less enthusiastic: "We appreciate the effort that has been put into the bill thus far. We still have a long way to go to achieve what can be called meaningful reform." (Republican lawmakers pushing for more far-reaching reforms, meanwhile, were less impressed.)

What does the bill actually do?

Sen. Steinberg released a statement on Wednesday highlighting four of the bill's accomplishments:

• Setting new "thresholds" for environmental impacts like traffic and noise that have become major obstacles to infill development projects. "Projects meeting these thresholds," a statement from Steinberg said, "would not be subject to lawsuits for those impacts under CEQA." (In its current form, the bill has avoided actually setting those thresholds, however. More on that below.)


• Reducing redundant CEQA challenges by limiting the types of lawsuits that can be filed in the late stages of a residential development project. When a project complies with a local plan and environmental impact report, the bill would disallow further litigation based solely on "new information" consisting of "argument, speculation, [or] unsubstantiated opinion" that doesn't contribute directly to "physical impacts on the environment."


• Streamlining CEQA for clean energy projects by establishing a new Renewable Energy Ombudsman in the Office of the Governor "to champion renewable energy projects."


• Speeding up the administrative process for CEQA lawsuits through an array of procedural fixes—from allowing lead agencies to respond to CEQA complaints via the Internet to allowing courts to issue partial "remands" of only the sections of an environmental document that don't comply with the law. The bill also directs the Attorney General to begin reporting to the Legislature "on whether or not CEQA is being abused by vexatious lawsuits."

The biggest reform proposal: Bumping aesthetics from CEQA

Buried in the bill's legal language is perhaps its most far-reaching provision: The legislation would remove "aesthetics" from the CEQA equation for residential and transit-oriented developments.

As the bill puts it: "Aesthetic impacts of a residential, mixed-use residential, or employment center project within a priority transit area shall not be considered significant impacts on the environment."

This would not prohibit a community from including local rules on aesthetics in their design review ordinances. But it would mean infill project opponents could no longer tie a project up in court simply because they don't like the way it looks—something high-speed rail opponents in Atherton tried recently. This is a substantive change to the law CEQA reformers have wanted for years.

What the bill doesn't do: Set new "thresholds"

One thing the bill does not do—at least not yet—is actually set new "thresholds of significance" that would allow infill development projects to better mitigate for impacts like noise, traffic, and parking. (Check out this story on how these issues are adding to the cost of urban development.)

When Steinberg first introduced his bill in February, the legislation stated that it was the Legislature's "intent" to set these thresholds, but a closer look at the language released this week shows those new thresholds have not yet been set. Instead, the bill simply directs the Governor's Office of Planning & Research to create guidelines for the thresholds by July 2014. Those guidelines would likely be challenged in court, making the timing of their enactment uncertain. (This may explain some business leaders' tepid response to the bill.)

A new focus: The Kings arena?

While specifics are still lacking on how the bill would streamline some parts of CEQA, Steinberg certainly seems to have a good reason for finding a solution: His district's proposal to build a new arena for its NBA franchise, the Sacramento Kings.

As soon as his amendments were made public, Steinberg began fielding questions about how his legislation would affect Sacramento's efforts to build the new downtown arena it needs to avoid losing its Kings franchise. Steinberg told reporters the arena "meets the very definition" of the type of project SB 731 would speed up: "Sometimes there are happy coincidences, and this is one of them," he added, saying he had forwarded his bill's language to the NBA.

By streamlining CEQA's administrative process, Steinberg's bill may help put the new proposed King arena on the fast-track. But with the city already facing a potential lawsuit over how the arena would address issues like traffic and parking—the very impacts SB 731 sidesteps—Steinberg has not yet produced the legislative slam-dunk he may need to avoid a protracted CEQA lawsuit.

It may prove difficult to set thresholds for these impacts in the legislation itself, but Steinberg could pursue other options that would accerelate their enactment—perhaps by empowering local agencies to set their own standards with proper oversight.

When Steinberg's bill goes into its first committee hearing next week, it will be worth watching to see if this is a direction lawmakers choose to go.