Gov. Gavin Newsom vows to take a regional approach to California’s problems

By on November 18, 2019

The state’s economy has grown considerably since the end of the Great Recession, but some parts of the state have grown more than others. It’s time to correct that imbalance, according to Newsom.  

Earlier this month, Gov. Gavin Newsom addressed the 2019 California Economic Summit in Fresno, a  bipartisan two-day gathering of private and public officials from throughout California.

One matter Newsom touched on is the early findings of the statewide Regions Rise Together Economic Development Initiative, which began with a “strategy session”  in the Inland Empire last May.

Regions Rise Together’s goal is to develop a comprehensive approach to long-term economic development in California. It’s emphasizing and use and transportation, two areas that are vital to the state’s economic future, and the Inland Empire’s.

The program is being sponsored by the Governor’s Office of Business and Economic Development [GO-Biz] and the Governor’s Office of Planning and Research. California Forward and California Stewardship Network, both statewide nonprofits dedicated to improving California’s economy, are partners in the project.

California Forward is the sponsor of the Economic Summit, which marked its eighth year this year.

During his keynote address to an estimated 900 people, Newsom declared that California’s future is bright, in part because Sacramento will begin addressing issues regionally.

Although Regions Rise Together has barely started its work, the program has reached some early conclusions.

Researchers have found that the economic growth California experienced from 2010 to 2018 hasn’t been shared equally between state submarkets. Approximately 70 percent of California’s job growth during that nine-year period happened in the coastal areas: Los Angeles, San Diego and the Bay Area.

At the same time, residents in Merced, Kern and San Bernardino counties saw their per capita income drop from nearly 90 percent of the state’s median to below 65 percent.

It’s that gap in economic growth that Regions Rise Together is trying to address, which is exactly what it should do, said Micah Weinberg, chief of executive officer of California Forward  in Sacramento.

“There’s no formal plan drawn up, and whatever recommendations are made will probably go into the governor’s budget or legislation at some point,” said Weinberg, whose organization advocates for shared prosperity statewide and greater performance and accountability at all levels of government.

“We believe its good they’re looking at California’s economy this way, because California is a series of regional economies. It’s the way we should approach these things.”

Regions Rise Together began with a meeting at Cal State University San Bernardino in September attended by several local dignitaries, including Tomas Morales, president of the university, and Paul Granillo, president and chief executive officer of the Inland Empire Economic Partnership.

Those in attendance concluded that, despite a growing population, incomes in Riverside and San Bernardino counties are declining in comparison with the rest of California. 

“While the region … has experience job and business growth in recent years, it still faces challenges both distinct from and similar to other inland areas of the state,” according to a report on the session by California Forward. “It still faces challenges both distinct from, and similar to, other inland areas of the state.”

Not everyone agrees with that conclusion. 

It’s not true that California’s Inland economies are naturally inferior to the coast economies, and it could be potentially damaging for the state to base its economic policy on that assumption, said Christopher Thornberg, economist and director of the UC Riverside School of Business Center for Economic Forecasting and Development.

“First, let me say that [ the center] could not be more supportive of what Gov. Newsom and GO-Biz are trying to do, which is involve all of the state’s regions more heavily when major policies are being considered,” Thornberg said. “We believe that’s a good approach.”

But in a statement released last month, Thornberg denounced the “dismal statistics” used by GO-Biz to asses the state’s Inland economies. He notes the rate of job growth in California’s Inland economies was greater than that of the coastal economies between 2010 and 2018, and that the 4.9 million Inland jobs would make the eighth-largest state, based on job count.

During a recent interview, Thornberg was even more blunt about what he believes are GO-Biz’s faulty economic premises, and said the state’s Inland economies are in much stronger shape than that agency believes.

“I get tired of some people looking down on the Inland economies because they don’t look the San Jose,” said Thornberg, referring to the Silicon Valley and its high-tech jobs. “People say the Inland economies don’t have high-quality jobs. What does that mean? Don’t they understand that those jobs in San Jose require a master’s degree in electronics. You can’t just move them inland and expect that to work.”

In October, the center produced a nine-page rebuttal to the early findings of Rise Together, which argues that the Inland economies are strong but should be made even stronger because much of the state’s economic future depends upon them.

That report has generated some negative feedback from Sacramento and other parts of the state, Thornberg said, but he declined to speculate on what impact it might have, if any.

“I  don’t know what [GO-Biz] is doing or how they’re doing it,” Thornberg said.

GO-Biz will continue to hold regional meetings, and it will probably take at least one year to cover the state, Weinberg said.