WELCOMEWELCOMECentral San Joaquin Valley

Economic Vitality Conversation

September 23, 2004

Made possible through generous support from Pacific Gas and Electric Company

Economic VitalityEconomic Vitality

in California’s in California’s Central ValleyCentral Valley

San Joaquin ValleySan Joaquin Valley

Credits & Data SourcesCredits & Data Sources

Regional Jobs InitiativeRegional Jobs Initiative

California Regional Economies ProjectCalifornia Regional Economies Project

California State University, FresnoCalifornia State University, Fresno

Central California Economic Central California Economic

Development CorporationDevelopment Corporation

PresentationPresentation

The Challenges of the San Joaquin ValleyThe Challenges of the San Joaquin Valley

Regional ActionRegional Action

Federal Government InvolvementFederal Government Involvement

Suggested Action by State GovernmentSuggested Action by State Government

The ChallengeThe Challenge

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The San Joaquin Valley is The Most The San Joaquin Valley is The Most Depressed Region in the U.S.Depressed Region in the U.S.

Copyright, the Fresno BeeCopyright, the Fresno BeeRJIRJI

PovertyPoverty

More than one in five San Joaquin Valley More than one in five San Joaquin Valley residents live in povertyresidents live in poverty

Poverty rate is more than twice the State averagePoverty rate is more than twice the State average Per capita income is 32% less than State averagePer capita income is 32% less than State average

Copyright, the Fresno BeeCopyright, the Fresno BeeRJIRJI

Health CareHealth Care

140 Physicians per 100,000 population 140 Physicians per 100,000 population compared to 270 state averagecompared to 270 state average

One in six Valley residents does not have One in six Valley residents does not have health insurancehealth insurance

Epidemic respiratory, diabetes, substance Epidemic respiratory, diabetes, substance abuse and teen pregnancy problemsabuse and teen pregnancy problems

Copyright, the Fresno BeeCopyright, the Fresno BeeRJIRJI

Air QualityAir Quality EPA has declared the Valley an EPA has declared the Valley an “extreme “extreme

non-attainment zone”non-attainment zone” Currently # 2, the Valley is expected to be Currently # 2, the Valley is expected to be

#1 in #1 in worst air qualityworst air quality in the nation by in the nation by year-end.year-end.

About About 2/3 of pollutants2/3 of pollutantsresult from conditions result from conditions outside the region’s controloutside the region’s control

Copyright, The Fresno BeeCopyright, The Fresno Bee

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EducationEducation

One third of students drop outOne third of students drop out, ,

almost twice the State average

Almost 60% of unemployment claimants

have no high school degree or GED

Percentage obtaining Bachelor’s degree Percentage obtaining Bachelor’s degree

is about half the state averageis about half the state average

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CrimeCrime Crime Rates higher than California AverageCrime Rates higher than California Average

Statewide Crime Rate - 3,948/100,000 Statewide Crime Rate - 3,948/100,000 (2002 FBI Data)(2002 FBI Data)

Fresno County - 6,112 Tulare Co - 5,052Fresno County - 6,112 Tulare Co - 5,052

Stanislaus Co - 5,954 Merced Co. - 5,040Stanislaus Co - 5,954 Merced Co. - 5,040

Felony Arrests per 100,000 in Central Valley run Felony Arrests per 100,000 in Central Valley run

50%-70% higher than State average50%-70% higher than State average

3 of the top 5 Metro areas in the U.S. for Auto 3 of the top 5 Metro areas in the U.S. for Auto

Thefts are in the Central ValleyThefts are in the Central Valley

Central Valley considered meth capital of U.S.Central Valley considered meth capital of U.S.RJIRJI

Unemployment in CaliforniaUnemployment in California14.0%

6.7%

6.5%

3.9%

5.7%

4.2%

7.1%

6.9%

Central ValleyRegion

Bay Area

Los AngelesCounty

Orange County

Inland Empire

San Diego County

All other Counties

Statewide Total

Regional Economies Project

Annual Unemployment Rate - 2003Annual Unemployment Rate - 2003

14.8%

12.6%

14.2%

14.6%

15.5%

12.3%

0 5 10 15 20

Merced

Madera

Fresno

Kings

Tulare

Kern

%

Regional Economies Project

Unemployment Rates for Unemployment Rates for San Joaquin Valley MSA’sSan Joaquin Valley MSA’s

Metropolitan AreaMetropolitan Area RankRank RateRate

Stockton-LodiStockton-Lodi 320320 10.1%10.1%

ModestoModesto 324324 11.5%11.5%

BakersfieldBakersfield 325325 12.3%12.3%

FresnoFresno 328328 14.0%14.0%

MercedMerced 329329 14.8%14.8%

Visalia-Tulare-PortervilleVisalia-Tulare-Porterville 330330 15.5%15.5%

**2003 Annual Average Rankings (331 total MSA’s), U.S. Dept. of Labor2003 Annual Average Rankings (331 total MSA’s), U.S. Dept. of LaborRJIRJI

15.2%

31.6%

14.6%

11.2%

8.2%

28.7%

25.2%

25.0%

24.9%

20.5%

16.4%

0% 5% 10% 15% 20% 25% 30% 35%

Sacramento

Sierra

Border

N. Sacramento

Valley

Coast

U.S.

N. California

California

Bay Area

SoCal

(Percent Change)

Growth in Total Jobs 1990-2003Growth in Total Jobs 1990-2003

Regional Economies Project

4.9% 4.2% 4.8%

13.6%

24.9%

14.6%

-0.2%

17.4%

-2.1%

16.4%

-1.2%

13.1%

-5%

0%

5%

10%

15%

20%

25%

30%

1990-1994 1994-2000 2000-2003 1990-2003

(Pe

rce

nt

Ch

an

ge

)

San Joaquin Valley California U.S.

Growth in Total JobsGrowth in Total Jobs

Regional Economies Project

$21,317

$22,982

$23,188

$23,785

$30,135

$30,269

$30,413

$30,467

$32,950

$45,555

$0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000

Valley

No. Sac. Valley

No. California

Central Sierra

Sacramento

SoCal

U.S.

Central Coast

California

Border

Bay Area

Per Capita Income - 2001Per Capita Income - 2001

$32,563

Regional Economies Project

6.1%

5.1%

4.8%

4.6%

4.1%

4.0%

4.0%

3.9%

7.4%

5.3%

0% 2% 4% 6% 8%

Bay Area

San Diego

California

Sacramento

Central Coast

San Joaquin Valley

Northern Sac Valley

Los Angeles

Central Sierra

Northern

(Percent)

Average Wage Growth 1997-2001Average Wage Growth 1997-2001

Regional Economies Project

0.7

9.1

11.3

13.3

15.0

20.9

21.6

22.4

34.9

56.7

0 10 20 30 40 50 60 70

All Government

Health Care & Social Assistance

Retail Trade

Accommodation & Food Svcs.

Administrative & Waste Svcs.

Transportation & Warehousing

Construction

Ag., Forestry, Fishing & Hunting

Other Svcs (Except Public Admin.)

Manufacturing

(Thousands of Jobs)

Job Growth in Leading Industries Job Growth in Leading Industries 1990-20021990-2002

Regional Economies Project

0

1

2

3

4

5

6

7

8

9

10

1990 1992 1994 1996 1998 2000 2002

(Th

ou

sa

nd

s)

Warehousing & storage

Specialized freight trucking

Couriers

Jobs in Transportation & WarehousingJobs in Transportation & Warehousing

Regional Economies Project

0

5

10

15

20

25

30

35

40

45

50

1990 1992 1994 1996 1998 2000 2002

(Th

ou

sa

nd

s)

Food manufacturing

Fabricated metal product manufacturing

Transportation equipment manufacturing

Jobs in ManufacturingJobs in Manufacturing

Regional Economies Project

Population Growth TrendsPopulation Growth Trends

Population of 8 San Joaquin counties grew by Population of 8 San Joaquin counties grew by 23.6%23.6% from 1990 to 2000 compared to from 1990 to 2000 compared to 13.8%13.8% StatewideStatewide

San Joaquin Valley population grew by 2.7% San Joaquin Valley population grew by 2.7% from 2000 to 2003 compared to Statewide from 2000 to 2003 compared to Statewide growth of 1.7%growth of 1.7%

For comparison, Los Angeles County grew For comparison, Los Angeles County grew 1.6%,1.6%, Orange County grew Orange County grew 1.4%,1.4%, and San Francisco a and San Francisco a negative negative (0.2%)(0.2%)

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Neglect from State GovernmentNeglect from State Government

Highway fundingHighway funding by lane mile lowest in the State by lane mile lowest in the State

School fundingSchool funding is $247 per pupil below State is $247 per pupil below State Avg.Avg.

Medicare reimbursement ratesMedicare reimbursement rates are lowest in the are lowest in the StateState

Severe under-funding of mandated Severe under-funding of mandated child welfarechild welfare servicesservices

Severe under-equity position in Severe under-equity position in judicial positionsjudicial positionsRJIRJI

State Appointments toState Appointments toBoards & Commissions Boards & Commissions (June 15, 2004)(June 15, 2004)

Of 37 members of the California Commission for Of 37 members of the California Commission for Jobs and Economic Growth, Jobs and Economic Growth, only oneonly one is from the is from the San Joaquin Valley San Joaquin Valley

Appointees to the other 34 most significant boards Appointees to the other 34 most significant boards and commissions:and commissions:– Los Angeles CountyLos Angeles County 7878– Bay AreaBay Area 6363– San DiegoSan Diego 1818– San Joaquin ValleySan Joaquin Valley 1616

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Why this mattersWhy this mattersto all Californiansto all Californians

Social reasonsSocial reasons High cost to all taxpayers: unemployment benefits, High cost to all taxpayers: unemployment benefits,

social services, health care.social services, health care. Cost to our justice system: hopelessness leads to Cost to our justice system: hopelessness leads to

crime and chemical dependencycrime and chemical dependency The unemployed do not contribute to the State’s The unemployed do not contribute to the State’s

tax basetax base High ROI potentialHigh ROI potential

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Regional ActionRegional Action

Central California Economic Development Central California Economic Development CorporationCorporation

Valley Workforce Director’s Assn.Valley Workforce Director’s Assn.

Valley Welfare Director’s Assn.Valley Welfare Director’s Assn.

Great Valley CenterGreat Valley Center

City and County AssociationsCity and County Associations

Air DistrictAir District

Industry Cluster GroupsIndustry Cluster Groups

Health Care InitiativesHealth Care Initiatives

Pursuit of a UC Medical school for the San Pursuit of a UC Medical school for the San

Joaquin ValleyJoaquin Valley

Pursuit of pilot accreditation programs for Fresno Pursuit of pilot accreditation programs for Fresno

State in specialty medical areasState in specialty medical areas

Consortium formed to address occupational Consortium formed to address occupational

training for health caretraining for health care

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Operation Clean AirOperation Clean Air

Clean Air Action Plan involving all sectors of the Clean Air Action Plan involving all sectors of the economy and all pollution sources, developed with economy and all pollution sources, developed with active community involvementactive community involvement

Unified support for an “Air Quality Empowerment Unified support for an “Air Quality Empowerment Zone” (modeled on Economic Empowerment Zone” (modeled on Economic Empowerment Zones) seen as the way to facilitate and finance Zones) seen as the way to facilitate and finance implementation of these plansimplementation of these plans

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Federal Government CommitmentFederal Government Commitment

Federal Interagency Task Force for the Central Federal Interagency Task Force for the Central Valley of CA Valley of CA

Supporting regional economic Development efforts Supporting regional economic Development efforts to attract and develop business to attract and develop business

Receptive to “Air Quality Empowerment Zone” Receptive to “Air Quality Empowerment Zone”

It’s not $20 billionIt’s not $20 billion ( (Appalachian Regional Appalachian Regional Commission), Commission), but it’s a startbut it’s a start

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Suggested Actions by the StateSuggested Actions by the State

Create a State Inter-Agency Task Force for the San Create a State Inter-Agency Task Force for the San Joaquin ValleyJoaquin Valley

– Coordinate with local government and the Federal Coordinate with local government and the Federal Inter-Agency Task ForceInter-Agency Task Force

– Pattern after Federal Task ForcePattern after Federal Task Force One or more designees from each Executive Branch One or more designees from each Executive Branch

DepartmentDepartment Lead Agency: Business, Transportation and HousingLead Agency: Business, Transportation and Housing Senior staff representative appointed by the Governor as task Senior staff representative appointed by the Governor as task

force coordinatorforce coordinator

Suggested ActionsSuggested Actions (con’t)(con’t)

Support legislative changeSupport legislative change– Amend or repeal anti-business legislation Amend or repeal anti-business legislation

Workers compWorkers comp Family Leave ActFamily Leave Act Overtime RulingOvertime Ruling AB 975AB 975

Recommend modifications of funding formulas, issuance Recommend modifications of funding formulas, issuance of funding preferences and granting of waivers for areas of funding preferences and granting of waivers for areas with “chronic unemployment”with “chronic unemployment”– Through Executive OrdersThrough Executive Orders– Through legislative actionThrough legislative action

AB 975AB 975 Manufacturer’s Investment CreditManufacturer’s Investment Credit

Suggested Actions Suggested Actions (con’t)(con’t)

Support efforts to retain businesses in California, citing Support efforts to retain businesses in California, citing the Central Valley as an alternative to leaving the Statethe Central Valley as an alternative to leaving the State

Increase appointments to Key Boards and Increase appointments to Key Boards and

CommissionsCommissions

Fund Infrastructure improvements on a proportionate Fund Infrastructure improvements on a proportionate level to the rest of the Statelevel to the rest of the State

Recommend actions to raise Valley K-12 funding to Recommend actions to raise Valley K-12 funding to State averageState average

Use the Valley as a “test-bed” for fast-tracking Use the Valley as a “test-bed” for fast-tracking recommendations of Performance Review Boardrecommendations of Performance Review Board

Suggested ActionsSuggested Actions (con’t)(con’t)

Support San Joaquin Valley Air Quality Support San Joaquin Valley Air Quality

Empowerment Zone Empowerment Zone

Support Construction of a U.C. Med Support Construction of a U.C. Med

School and Medical Research CenterSchool and Medical Research Center

Support granting authority for CSUs to Support granting authority for CSUs to

grant professional and applied doctoratesgrant professional and applied doctorates

Partner with Regional EDC’s to market CAPartner with Regional EDC’s to market CARJIRJI

DiscussionDiscussion

Economic Vitality ConversationToday’s Focus

1. What state actions will have the most immediate positive impact on California’s economic recovery?

2. What state actions will result in the most significant long-term improvement to California’s economic competitiveness and comparative advantage?

3. How do we best structure an effective partnership between the regions and the state around economic strategy?