The California economy is finally shedding the last effects of the most severe economic downturn in most of our lives. As of the most recent reporting period, California’s official unemployment rate has now fallen to 6.3%, down from its high of 12.4% in 2010, at the height of the Great Recession. That’s a vast improvement, though still materially higher than the national unemployment rate of just under 5%.
What role should California’s state government play in its economic performance? The first way to answer that question is to say, very clearly, that one of the foremost responsibilities of California’s elected officials is to ensure that our state government, its tax rates, and its regulatory framework should have as minimal an impact on economic performance and development as possible.
Having said that, it’s also important to note two key facts: first, that California’s massive size and scale make it inescapable that we are going to have a state government that is necessarily large by most measures in order to simply serve its constituents across an expansive geography; and secondly, that California’s tradition of innovative, proactive, and progressive approaches to government are, on the whole, a good thing, and one of the attributes that have made it the nation’s leading force in so many areas over its history. Both of these facts are strengths, as long as those who are entrusted with managing the state’s finances and affairs do so while staying within our means.
There’s a saying attributed to Warren Buffett, that “It’s only when the tide goes out do you find out who was swimming naked.” This insight, intended as a reference to banks during the financial crisis, applies equally well to our state government. When the housing bubble burst in 2008, instigating the collapse of financial markets and the pain which ensued, it became all too evident that California’s state finances were ill prepared to absorb even a brief economic downturn, much less one so severe.
Governor Brown and State Treasurer Chiang deserve credit for being both responsible and forthright with respect to the need to prevent us from finding ourselves in that sort of fiscal state again. Now that the state’s fiscal picture has once again improved, in addition to making arrangements for an appropriate state ‘rainy day’ fund and holding the line on the expansion of costly new programs, state government can also play an important role in fostering economic development by supporting the following broad goals:
- Emphasizing job creation from within the state through support of key industries and entrepreneurism
- Strengthening support and training for advanced manufacturing
- Securing our region’s fair share of funding to reduce traffic
- Creating dynamic public-private partnerships to meet the demand for properly trained talent in key industries
- Helping California’s public universities create pathways between research and commercialization
- Taking full advantage of California’s proximity to the Pacific Rim in supporting business export growth through strategic initiatives and partnerships.
Most of the economic impact of state government is the result of departments and programs overseen by either the Executive branch, under the direction of the Governor, or by other constitutional offices (Treasurer, Controller, Secretary of State), Against that, the state legislature plays two key roles in the ways in which state government either helps or hinders economic development in our state: through legislation, to include adoption of the state’s annual budget and the creation of new departments and programs; and through oversight of existing departments and programs.
In today’s climate of special interest pressure and big money politics, the voices and concerns of average Californians are too often ignored. As an accomplished businessperson who brings a broad range of experience to the effort, I understand the balance that needs to be struck between fiscal prudence and proactive economic development, and as your state senator I will ensure that new proposals or programs meets that standard, while also working to reform existing programs in order to meet the broader goal of a prepared state government and a prosperous state economy.