CALED Economic Stimulus: Short and Medium Term Solutions for Economic Development

An effective stimulus package should raise demand in the "short run" while improving the capacity of the economy to supply goods and services in the long run. We need to focus on those hardest hit by the down turn while at the same time tackling long-standing infrastructure need. This tactic will have a larger impact on the economy, on a dollar for dollar basis. We should put a high priority on pushing out and leveraging programs and resources already in place i.e. money that people can soon pump back into the economy by a quick increase in government spending.

The best ways for the State to intervene in the economy "quickly" is to accelerate existing funding projects to fruition and by using tactics to leverage existing funding resources. So, how many billions of dollars of approved proposition funding has been allocated?

What follows are some solutions (short term (ST) and medium term (MT)) the State of California could implement to help turn a declining economy around?

➢ (ST) Consumer Confidence is affected by the media. We need a statewide media outreach strategy with a multitude of positive stories and initiatives. We need a media strategy aimed at restoring people's confidence to spend. We need to develop a positive statewide message and sound bites on current business growth and the importance of California business to California's economy. Businesses and the public cannot hear this message enough.
The state could identify existing media resources in the various State Departments to help fund a stimulus media budget through the Business, Transportation and Housing Agency to conduct an ongoing internal and external media marketing and promotions campaign.

➢ (ST) Accelerate the process for various state funding program requirements for projects, which create jobs. Call on every city, county, special district to accelerate infrastructure projects.

Implement a temporary relaxation of regulations- CEQA, wastewater, air quality- to accelerate existing infrastructure projects.

➢ (ST) Leverage cash resources. Emphasize leveraging incentives and infrastructure focused on private sector growth and development;

• Establish an anti-recessionary initiative that would create and leverage a pool of existing funds to be used to stimulate private sector job development... reinstate and implement SB 661 Alarcon regarding a secondary market for existing RLF's in Rural California....some examples:

• Provide a secondary market which will put over $1 billion back into the California economy by recapitalizing local revolving loan funds

• Loan guarantees for infrastructure grants/loans (special rural emphasis)

• Direct loans
• Loan-to-loan programs
• Letters of credit/credit enhancement/insurance
• Linked deposits
• SBA participation, i.e., to purchase SBA guaranteed first trust deeds or the non-guaranteed portion of SBA loan guarantees
• Infrastructure loans

• Leveraged resources could come from:
• Community reinvestment dollars (banks)
• PERS investment
• STRS investment
• IDLE bond funds
• State Treasurer pooled money investment fund
• Lottery proceeds
• Employment Training Panel (ETP)

• The State Department of Housing and Community Development should look into using federal section 108 to borrow future dollars for use now.

• Expand the State Treasure's Bond program that was used for funding Tesla Motors to cover growing manufacturing sectors.

➢ (ST) Expand the resources and flexibility of the CA Employment Training Panel.

• Set aside a portion ($10 million) of the Employment Training Panel funds for economic development that could include direct loans to business for fixed asset and working capital, i.e., a loan program would pay the ULI fund back with interest.

• Increase Employment Training Panel contract amount for ETP contracts that can be administratively approved by ETP Executive Director.

• Create a formal set-aside of ETP marketing and implementation funds for economic development organizations that are willing and qualified to directly identify and fund training contracts for local business.

➢ (ST) Enterprise Zones- temporarily extend zone benefits to any city and or county of the State with an unemployment rate in excess of the State average.

➢ (ST) Establish a rural job creation strike force- talent pool of public and private "business assistance experts" -that would normally be unaffordable to a rural community. An integral objective would be to build and retain a long-term local capacity to solve local problems, without growing the state bureaucracy.

➢ (ST) Public assets for jobs. Require all state agencies to provide to the Governor an inventory of state-owned lands that could be used to leverage revenue for the state and/or to facilitate economic development opportunity in the communities. Change the law to make jobs in industrial and commercial development a top priority for surplus lands.

➢ (ST)Develop a statewide inventory of "local shovel ready" industrial sites.

➢ (ST) Establish an economic development advocate (ombudsperson), utilizing existing staff, in every state department who would be responsible for facilitating the department's response to business investment issues. In addition the state should develop and undertake an outreach and training program to help state agencies to understand the importance of economic development issues, (revenue to the state) and how their actions or inactions impact economic development, indicate how they do and can advance the state's job development goals.

➢( ST) Designate the Infrastructure Bank as a "one stop capital shop" for business. Some State programs that could be moved to the bank include:
• The Integrated Waste Management business loan program.
• California Statewide small business loan guarantee program
• The Cal-Cap program.
The "One Stop Capital Shop" would also provide a single location for information on all state/federal and local development funding sources.

➢ (ST) The State of California should establish "one-stop shopping" for both economic and demographic data by county, by city. Timely information and data of the highest quality is the essence of any sound economic development effort. The State Labor and Workforce Development Agency should raise economic development information collection and dissemination to the "highest priority."

➢ (ST) Create a set-aside of State Workforce Investment Board incentive funding which encourages integration of planning and implementation between state and local workforce and economic development. Encourage the development of best practices profiles to publicize successes.

➢ (ST) Formalize a Community College Center "Initiative for Excellence in Customer Service" to train State and local employees on how to work with business and industry.

➢ (ST) Re-establish the Governor Office of Regulatory reform to establish a "one-stop" website on business regulations. This "one-stop" should provide interested parties with a place to access and comment on proposed rules affecting business.

➢ (MT) Enhance small business credits. Every small business operating within this state should be entitled to claim any amount paid to the US Rural Development and US Small Business Administrations. 

➢ (MT) Create prevailing wage regions for parts of California that are not economically equivalent or affiliated with the greater bay area or greater southern California regions.

➢ (MT) Establish star communities by creating a competitive "certification" program that provides rewards and incentives to communities that make a commitment to business retention. To qualify communities could be required to meet certain criteria. Create a "business climate fund" to provide local organizational incentives and rewards. We think business might support a small short term fee that would be used to specifically improve the business climate in California. Ideas for fee sources could be:

• Fee on the incorporation tax
• A fee on the local business licenses
• A special fee on industrial and/or commercial property transfer.
• A set-aside of environmental penalties (fee & fines)
• Redirect some ETP funds
• Divert Infrastructure Bank interest

➢ (MT) Redevelopment is a tool for economic development.  Allow the redevelopment agencies, under special circumstances, to utilize redevelopment funds outside the redevelopment areas for economic development.

➢ (MT) Support the organizational needs of local economic development corporations. One idea could be to provide a small tax deduction for private companies who donate equipment, land, and services to support the efforts of nonprofit economic development corporations. Another idea might be to add a small increase to the unemployment tax.

➢ (MT) Advocate a policy that requires the Public Utilities' Commission to approve utilities requests for funding job development activities. 

REMEMBER ECONOMIC DEVELOPERS DO NOT CREATE JOBS WE ONLY FACILITATE JOBS!