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No Blueprint to Guide State Actions or Expenditures

California's community and economic development policy is driven by a number of statutory mandates, the first of which is the Environmental Goals and Policy Report (EGPR.)  The EGPR is the state's 20-year growth and economic development strategy.  Prepared every four years, it serves as a guide for individual department plans and overall state expenditures. 

The EGPR analyzes the current context of the state's environmental, economic and social setting; the driving forces behind growth and development; and the outside influences that affect many of the state's actions, policies, and programs.  Based on this analysis of existing conditions and influences, the EGPR proposes cross-cutting and integrated goals and policies for the state which will allow it to achieve the overarching mission of sustainable development. 

Statutorily, the EGPR is also one of the state's main tools for implementing the state planning priorities to promote infill development and equity, to protect and enhance environmental and agricultural resources, and to encourage efficient development patterns.

In proposing an implementation strategy for the state planning principles, the 2003 update to the EGPR proposed fundamental changes in the way that state government conducts itself.  The 2003 EGPR Update made a distinction between things that should continue to grow or develop—such as jobs, productivity, wages, capital, savings, profits, information, healthcare, education, knowledge, environmental quality and social equity—and things that should not—such as pollution, waste, poverty, and dependence on non-renewable resources.  Unfortunately, the policy recommendations in the 2003 EGPR Update were not specifically pursued.  Further, the state failed to meet the deadline for providing an update in November of 2007. 

Another important state planning document is the Five-Year Infrastructure Plan (Infrastructure Plan), which is required to be updated each year and submitted to the Legislature at the same time the Governor submits his/her proposed budget.  The Infrastructure Plan documents the state's overall need for new, as well as the rehabilitation and expansion of existing, infrastructure.  The Infrastructure Plan must be sufficiently detailed to provide a clear understanding of the type and amount of infrastructure proposed to be funded and the state programmatic objectives that will be achieved by this funding. 

Among other requirements, the Infrastructure Plan must also be consistent with the state planning priorities and put forth a specific funding proposal to meet the state's current and future infrastructure needs.  Submittal of the annual update to the Infrastructure Plan has been spotty with only two issued, one in 2004 and 2008.  In 2008, the Governor also prepared a Strategic Growth Plan.

Submittal of the annual budget to the Legislature is also supposed to be accompanied by the Governor's annual Economic Report, which reviews the state's current economic development conditions, forecasts trends, and identifies policies and actions that promote growth in employment, productivity, income, and purchasing power of Californians.  In conjunction with the Economic Report, the Governor is required to outline issues and make recommendations to increase employment and investment in the state.  No formal Economic Report has been submitted to the Legislature since 2000, although a statistical abstract was prepared in 2006. 

While Governor Brown's proposed state budget included an assessment of the current economy and recommendations for the realignment of some of the state's economic development activities, it did not include a comprehensive list of policies or recommended actions that would lead to an increase in jobs and investment in California.  Following the enactment of the 11-12 budget, the Governor did propose a number of economic development initiatives and in march 2012 he proposed a comprehensive reorganization plan, which became effective on July 3, 2012.   

Given the importance of international trade and foreign investment to the California economy, existing law also requires the development of a state International Trade and Investment Strategy (ITI Strategy).  Required as a pre-condition for undertaking state funded trade activities, the ITI Strategy is prepared every five years based on current global, national, state and regional economic research.  The ITI Strategy is also required to have a public vetting with the Legislature to ensure the inclusion of jointly agreed upon goals and measurable objectives.   The current ITI Strategy was finalized in August 2008 and the next strategy is due in August 2013.  Current legislation, AB 2012 (John A. Pérez), proposed to modify the state's internal trade policy and extend the deadline for the hearing to 2014.

Existing law also requires the development of a Goods Movement Action Plan (GMAP).  The purpose of the GMAP is to improve and expand California's goods movement industry and infrastructure in a manner which will generate jobs, increase mobility, reduce traffic congestion, improve air quality, protect public health, enhance port safety, and improve people's quality of life.  The GMAP work done to date takes a very macro look at the goods movement industry currently serving California business, and makes recommendations for projects on California's highway, rail, and air transport goods movement networks.  It does not, however, link to the other planning documents.  It also does not make recommendations at a sufficiently refined level to address the needs of businesses with fewer than 99 employees (representing 97% of all businesses in the state) nor specific industry sectors.

In addition to the assessment documents discussed above, the state had, until August 2011, a requirement to have a two-year state Economic Development Strategic Plan, which set state economic goals and recommendations necessary to improve the business climate and economy of the state.  The Plan was to also evaluate the adequacy of state and local infrastructure, the effectiveness of the state's economic development programs and identify strategies to foster job growth and economic development covering all state agencies, offices, boards, and commissions that have economic development responsibilities. 

The timely and regular update of the state Economic Development Strategic Plan was also designed to allow the Administration and Legislature to monitor the effectiveness of state programs and services on an ongoing basis. The state Economic Development Strategic Plan was last prepared in 2002 and its statutory mandate was eliminated as part of the 2011-12 budget actions.

Taken together, these six assessment and strategy requirements are designed to form the foundation for the blueprint of the state's short-, middle-, and long-term economic success.  The EGPR sets the overall long-term framework in which individual departments and agencies can develop more detailed plans, including the state transportation and state housing plans. 

The Infrastructure Plan allows the state to keep track of its infrastructure needs and set a rational infrastructure development agenda that supports the long-term economic and population growth assessments outlined in the EGPR and the state planning priorities.  The development of the state Economic Development Strategic Plan is built on the information and policies provided in the EGPR, the Infrastructure Plan, the ITI Strategy and Economic Report. 

With No Game Plan it is Hard to have Game

While some of this information is contained in a variety of state reports, it is unfortunate that California does not have a current and complete set of these economic assessments to help guide state actions that support innovation and global competitiveness.

Copyright © 2011 State of California