The week ahead: Summits and such

150 150 Chris Nelson

The Lede

In Santa Clara last Friday, over 500 Californians sat down to discuss the economic future of our state at the first-ever California Economic Summit.

The tone was set immediately by Secretary George Schultz, who bluntly stated to applause that “democracy is not a spectator sport.”

It then moved into a Q&A session between Lt. Gov. Gavin Newsom and Pulitzer Prize winning author and New York Times columnist Thomas Friedman. As Joe Matthews pointed out in a tweet, it was the government official grilling the journalist this time.

Friedman offered his trademark global perspective but related it back to California, where he spends a decent amount of his time. Like any good journalist, he put things in terms that resonated with his audience.

He noted that when the Cold War ended, we put our feet up when we should have been rolling our sleeves up as 2 billion people hungry to compete with the United States were unleashed on the global marketplace. He touched on well-known concepts (faltering education will ensure this decline continues), the philosophical (“average is over” in this age of hyperconnectivity) and the inspirational (he wants America to once again be the launchpad for global innovation).

If anyone doubted he could be relevant at this summit, he also quashed that notion pretty handily.

We then saw presentations on the five pillars that the Summit team identified as critical focus areas for economic recovery: Innovation, Infrastructure, Workforce, Capital, and Regulations.

Once again, everything resonated. The economy is always a hot button issue because it strikes a chord in everyone’s lives, but the hunger in the room to actually get something done was palpable. One glance at the Twitter hashtag #CAeconomy we set up as a repository shows vibrant participation, positivity about the summit and an unwavering desire to shove politics aside in the name of recovery.

Much was discussed. CEQA and talk about regulation seemed to be of particular interest, but that’s just one observation; nothing at all came close to falling flat.

Small group sessions (facilitated by crowdsourcing pioneers Crowdbrite) brought an eerie hush to the room as each table buckled down and calmly went about discussing region-specific goals and the actions needed to manifest them.

With iPads and an abundance of sticky notes and sharpies, the discussions were recorded in unprecedented fashion that could be broadcast in real time on massive screens flanking the area. Every thought will be saved, compiled and analyzed with the goal of presenting the top-level results in a month’s time.

It’s something you have to see to fully appreciate. Technology and ideas coming together in a room where the will to use both on the part of hundreds of people toward a common goal was truly inspirational.

The day progressed with more breakout sessions. While the morning sessions had a regional slant, the afternoon ones were tied to the five pillars mentioned above. With everything recorded and everything available online for further modification, the Summit expects to issue a report based on this data in mid-June.

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Just as the Summit closed on a note of positivity and hope, Gov. Jerry Brown took to YouTube the following day with a stark juxtaposition to announce that the state’s budget shortfall had ballooned from $9 billion to $16 billion. This bad news was accmpanied by a reminder that things could get much worse if voters do not pass a revenue-increasing measure at the ballots in November. Gov. Brown is sponsoring one of two that will be put in front of voters on November 5.

Reuters reports on the announcement:

The deeper deficit forecast reflects the state’s uneven economic recovery: tax collections this year have fallen about $4 billion below projections, though many state legislators and economists had warned that the January revenue estimates were far too optimistic.

The deficit also grew because some previously agreed cuts to state social programs, including the Medi-Cal healthcare program for low-income families and seniors, were either delayed by legislators or blocked by the courts and federal officials.

Gov. Brown is expected to hold a news conference today to discuss exactly how he will attack this new double-digit hole we are in.

UPDATE: Gov. Brown released his revised budget proposal this morning. The verdict? More and more patchwork solutions to close a now $15.7 billion gap. Most notably, Gov. Brown is utterly dependent on his own revenue-increasing measure. But, as Kevin Yamamura reports, there are other aspects justifying this classification:

Among the most unusual ideas: asking state employees to work four days a week for a total of 38 hours instead of 40, or 9.5-hour shifts. Brown suggested in the budget that the proposal would save operational costs by shutting down offices once a week in addition to 5 percent of salary. The proposal would likely have to be bargained with labor unions since Democratic lawmakers will not impose the cuts unilaterally.

The governor also proposed giving UC $38 million less than he did earlier this year. Both proposals make it more likely that UC will raise tuition in 2012-13 after UC officials said last week they needed an additional $125 million to avoid a 6 percent hike on students.

A familiar quotation comes to mind: “what we have here is a failure to launch.” The state’s economic engine is feeling like one sitting in a beat up old Chevy truck with 250,000 miles on it and a rusty transmission, not one powering the 9th largest economy in the world.

The litany of proposed cuts run deep and spare no one. Mr. Yamamura’s piece has all of the gory details, but the usual suspects of the UC system, the court system and health & welfare services take some big hits. The governor called this a “day of reckoning” and one where we have to “take our medicine.”

Medicine usually leads to better health, however. For many dependent on social services or cheap in-state tuition, this will be more like a poison pill.

Thankfully, there is increasing interest in circumventing Sacramento all-together as a means of recovery. The Summit we sponsored on Friday was rock-solid proof that this sentiment exists. Look for more content by way of the Summit this week and the following detailing exactly what was discussed and how the participants are committing to to turn thought into action.


Chris Nelson

All stories by: Chris Nelson