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object(Timber\Post)#3875 (44) { ["ImageClass"]=> string(12) "Timber\Image" ["PostClass"]=> string(11) "Timber\Post" ["TermClass"]=> string(11) "Timber\Term" ["object_type"]=> string(4) "post" ["custom"]=> array(5) { ["_wp_attached_file"]=> string(13) "R_605MB1R.pdf" ["wpmf_size"]=> string(7) "6295986" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(41205) "Public Policy Institute of California Mark It’s Your CBaldassare/ Ellen hoiceHanak The California 2025 project was supported with funding from the William and Flora Hewlett Foundation. The Public Policy Institute of California (PPIC) is a private operating foundation established in 1994 with an endowment from William R. Hewlett. The Institute is dedicated to improving public policy in California through independent, objective, nonpartisan research. What kind of California do you want? The Challenge California is being reshaped by a changing population, a globalizing economy, and fantastic new technologies that are redefining our relationships and our sense of geography. The grand universities, highways, and water systems that fueled prosperity for recent generations are now stretched beyond their capacities. The reforms most critically needed are threatened by major obstacles in leadership and governance, finance and equity, influence and participation. We haven’t reached a crisis point, but trends and forces are gathering that could seriously erode the quality of life in California in the next two decades. Thoughtful, systematic action is needed. If we don’t make careful choices now, the future we get by default may not be our worst nightmare, but it probably won’t be the brightest dream for ourselves, our children, and our grandchildren. We should make no mistake — this isn’t someone else’s problem or responsibility. All Californians have a stake in this. And all Californians with the ability to influence the policies and programs needed to secure our future must understand the problems and options and make their voices heard. CA2025: It’s Your Choice is a starting point. It describes facts about our population, our economy, and our physical structures so that we can start a discussion about the future from the same page, beginning with this question: What kind of California do you want? It’s a simple question that is extremely hard to answer. To reach a common future that reflects our regional, financial, and ethnic differences will require tough choices about sacrifices to be made and higher prices to pay. Not least important, the long-range view of California’s future presented here helps illustrate how short-term gains for one group today can jeopardize long-term opportunities for all groups in the future. ca2025: It’s Your Choice p. 04 A larger, more diverse population Looking ahead, the critical issues about California’s population will continue to be its size and diversity. In terms of size, the most rapid change has already occurred. But the population continues to change based on trends set in motion in recent years. Since 1960, the state’s population has more than doubled, reaching 36.5 million by mid-2004. During the 20th century, no other developed region of the world experienced population growth rates as great as California’s. Indeed, California’s growth rates more closely resemble those of a less-developed country. Meeting the first-world demands of a population with such rapid growth rates presents a formidable challenge. Equally remarkable? The diversity of California’s population growth.Today, California is home to sizable immigrant communities from more than 60 different countries, arguably making California’s population the most diverse in the world. Whites, who represented 80 percent of the population in 1970, are just under half today and will be about a third by 2025. Latinos, meanwhile, will represent nearly half of the state by 2025. (fig. 1) Another significant demographic change is the aging of California’s population. Demographers project that the number of seniors in California will more than double in a little more than a generation. By 2025, about one in every seven Californians will be over the age of 65. At the other age extreme, and of even greater importance p. 05 section 1. The Challenge FACT 01 In 2025, 30% of Californians will be foreign born. Almost half will be Latino. One in seven will be over 65. because of education expenditures, the child population of California is expected to change very little over the next 10 years. While the population continues to increase, the days of its exploding growth may be over. Experts have recently scaled back their predictions for California’s growth, with important implications for schools, highways, housing, and other infrastructure categories. All of the state’s major university and government researchers made the same recalculations after determining that fertility rates for California women are dropping faster than expected and that immigration has subsided. In hindsight, they find that California’s unusually high population growth rate actually peaked in 1989 and is expected to be closer to the national average in the future. Today, most demographers predict California’s population will be between 44 million and 48 million in 2025. (fig. 2) But the growth in the state will not be the same everywhere, meaning that some regions will have much greater infrastructure needs than others. Many inland counties from Riverside to Sacramento are expected to grow by 50 percent between 2005 and 2025. One of the fastest growing metropolitan areas in the United States, the Inland Empire, now has a larger population than metropolitan St. Louis or Denver. In coming years, growth rates in the northern San Joaquin Valley are expected to equal the experience in the Inland Empire. Meanwhile, more than 60 percent of the state’s population will continue to live in coastal areas, as cities like Los Angeles and San Francisco keep growing, although not as fast as the inland counties. Even though growth will not be as phenomenal as in the past, it is still daunting to consider the planning and construction needed over the next 20 years to add a population about the size of Ohio — the nation’s sixth largest state. And the demand for infrastructure is not driven only by future growth. The state’s systems are still catching up with the backlog of demands generated by the population explosion of the 1970s and 1980s. population in millions section 1. The Challenge FIGURE 1. POPULATION PROJECTIONS BY ETHNICITY 10 2000 8 2020 6 4 2 0 population in millions FIGURE 2. POPULATION PROJECTIONS FOR CALIFORNIA 50 Figure 1. 40 California’s population will become increasingly diverse. high estimate low estimate Figure 2. By 2025, California will have between 30 7 million and 11 million more people than today. p. 07 2000 2005 2010 2015 2020 2025 Other Asian American White Latino Af. p. 08 ca2025: It’s Your Choice Population projections are based on current trends, and experts warn that the state’s long-term demographic profile remains volatile. There are questions about the state’s demographic future that will be determined by trends in the economy — for example, availability and quality of jobs. During the 1990s, recession slowed foreign immigration and caused so many residents to leave the state that New York City actually grew faster than Los Angeles for the first time in nearly 150 years. Now, the key question for prognosticators is whether California will become the next demographic New York — a place of slow population growth in which thousands of international migrants arrive each year while thousands of domestic migrants leave. Or will California return to the population growth patterns that have characterized so much of its history, attracting migrants both internationally and domestically? A new economy The answer to that question is likely to be determined by the shape of the state’s future economy. California’s economic engine is expected to grow and change remarkably. The state is already ranked by many as the fifth largest economy in the world. Between 2000 and 2020, the workforce is projected to grow by more than 30 percent, to a total of roughly 20 million jobs. Almost 1 million new workers will be added in the Bay Area and perhaps 2–3 million more around Los Angeles, which will be home to half the state’s workforce. In percentage terms, the growth rate could even be higher in San Diego and the Central Valley. California will also continue its shift from a manufacturing jobs base to one driven by services industries. By 2020, a sizeable majority of workers in California will be employed in service-oriented industries. At the same time, manufacturing jobs, as a share of state employment, will drop by at least 25 percent. (fig. 3) Although services put less burden than manufacturing on roads, water facilities, and physical structures, this economic shift poses a crucial challenge for the future. Many people, if not most, see service-oriented industries as the domain of less-educated, low-wage workers. But service employment includes business, professional, entertainment, recreation, health, and educational activities. Compared to manufacturing, these require higher levels of education. FACT 02 By 2020, the workforce is projected to grow by more than 30%. FACT 03 77% of Californians have only some or very little confidence in their state government’s ability to plan for the future. percent share of total employment FIGURE 3. INDUSTRY PROJECTIONS FOR CALIFORNIA 40 35 30 25 20 15 10 5 0 Manufacturing Services 2000 2020 Figure 3. Future job growth will be driven by the services sector as manufacturing declines. The critical question is whether California can produce or attract the educated workforce this shift requires. The changing demographic mix of the population could work in the other direction because most population growth will be among groups that have historically had less education. produced a host of changes: Proposition 13 and its progeny; super-majority requirements for raising revenues; anti-tax sentiment in general; term limits; and a belief in and growing use of the initiative process, which allows a disenchanted public to exercise its preference for making policy at the ballot box. A changing context for planning Besides the size of the population, another major challenge is its mindset. A very large proportion of Californians deeply distrust government and those who govern. They have little faith in either the good faith or the competence of their elected officials. That distrust and a growing fiscal conservatism have All these things make consensus building and planning for the future much more difficult than they were during the great building years of the mid-20th century. Those who believe that what California needs to meet future challenges is another great leader, a reincarnation of Governor Pat Brown, if you will, are not realistic about how the context of governance and planning has changed. section 1. The Challenge p. 11 Where the Trends Lead section 1. Where the trends lead p. 00 One of the most threatening trends is the potential mismatch between the education requirements of the new economy and the amount of education its future population is likely to have. numbers represent percentages FIGURE 4. PERCENT DISTRIBUTION BY EDUCATIONAL ATTAINMENT, 2020 40 35 30 25 20 15 10 5 0 less than high high school school graduate graduate some college college graduate labor force demand population supply Figure 4. If current patterns persist, the Calfornia economy will require more highly educated workers than the state may be able to provide. The shift from a manufacturing base to one far more dependent on services will require a more educated workforce. Today, workers in most service-oriented industries are at least twice as likely as manufacturing employees to have graduated from high school. Indeed, the fastest growing service-oriented industries have the highest share of employees with college degrees. The problem is that education trends in California are not projected to keep pace because population growth is concentrated among groups that have typically attained lower levels of education. Immigrants and the children of immigrants — primarily Mexican ca2025: It’s Your Choice p. 14 section 2. Where the Trends Lead Americans — will make up a large percentage of the 2025 working-age population. Up to now, this group has been among the least likely to finish high school or to attend or finish college. If the trends continue, there will be a gap between the number of college graduates demanded by the state’s economy and the number of Californians with college degrees. If the gap doesn’t narrow, and if the California working-age population doesn’t have the education required by jobs in the 2025 economy, will we have a generation of chronic underemployed, who will need the state’s social and income-transfer programs? Can we make up the labor force needs by continuing to attract more highly educated people from other states and countries? Or will they be attracted to other parts of the country where the demand for highly educated workers will also be growing? p. 15 FACT By 2025, the college age population — 18 to 24 year olds — 04 will have increased by more than 800,000. If we don’t have the educated workforce we need, we’re potentially in a double bind: Where will the tax revenues come from to fund the transfer programs or to keep roads repaired, water clean and flowing, and schools running? Is it likely that the growing proportion of older people will be a source of high tax revenues? It is particularly ironic that as the state seeks to cope with its budget woes, we may be limiting access to our public institutions of higher education, thereby potentially limiting the source of higher tax revenues from the working population in the future. Besides these concerns, if California cannot provide the educated workforce required, companies might leave the state to meet their requirements or may be forced to hire increasingly from outside the state. Or key industries may falter, leaving business and workers at risk. Reversing the trend will test the public’s commitment to education. And Californians have shown strong support for education. Schools have been at or near the top of the priority list for California voters during the past several years. They’ve pressured lawmakers to make dramatic reforms and have also lowered the threshold for approval of local school bonds from two-thirds to 55 percent. As a result, since 2000, an unprecedented $42 billion in state and local borrowing has been directed at K–12 schools. Although these bond funds will go a long way toward meeting the backlog of unmet needs and making room for growth, more funds are likely to be required to provide a decent learning environment for all California’s children. Some state bond funds are earmarked to school districts facing hardships. However, more could be done to address their special problems. In higher education, thanks to state and local bonds and private contributions, the money for buildings and classroom space is adequate for much of the expansion required over the next decade. But because of recent budget cuts, universities are left without enough operating funds to teach all of the eligible students. In 2004, 7000 youth were initially turned away from the University of California. Had they not been admitted eventually, this would have been the UC system’s firstever violation of the 1960 Master Plan for Education. Spending cuts and fee hikes have also led to enrollment drops in the California Community Colleges, which serve the most economically vulnerable populations. A failure of California’s education system to deliver the workforce it needs is the most critical threat to the future, but there is also considerable work necessary to expand water and transportation facilities and make more efficient use of the facilities in place. Infrastructure needs are also not spread evenly. Part of the challenge for the future is to balance demographic and social trends against the fair distribution of resources. p. 17 section 2. Where the Trends Lead Shrinking resources and growing demand Experts have scaled back their forecasts for the state’s water needs because of lower population projections and an expected reduction in agriculture as Central Valley farms give way to new homes. Still, the demand is going up and the supply is actually shrinking. In 2000, roughly one acre-foot of water would supply four Californians for a year. With current trends, experts say the state needs about 3.1 million acre-feet of new water by 2030 to accommodate the expected population growth. Some additional resources are needed to support endangered wildlife and to make up for cutbacks in California’s use of the Colorado River, as some neighboring states begin to use their full share. To reverse the trends, experts say water conservation is essential. Water metering and other policies could actually resolve up to half of the need for new water sources. These and other innovative solutions, including desalination, wastewater recycling, and the sale of some farm water to cities, may offer more promise than building large new water storage facilities — the predominant model of the 20th century. Fuel efficiency and outdated policies Fuel-efficient cars like hybrids could improve the future in California by cutting air pollution and reducing the economy’s dependence on fuel prices. Ironically, however, absent effective policy response, greater fuel economy could have ominous consequences for transportation investments. (Fig. 5) ca2025: It’s Your Choice p. 18 FACT 05 Municipal water use could expand by 3.1 million acre-feet over the next 25 years. FACT 06 Congestion will cause travel time in the state to increase by 48%. numbers represent percentages FIGURE 5. GROWTH IN POPULATION AND VEHICLE MILES TRAVELED ON STATE HIGHWAYS IN CALIFORNIA 500 vehicle miles traveled 400 on state highways population 300 200 100 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Figure 5. Miles traveled will outstrip population growth, putting greater strain on roads and highways. Historically, California has relied heavily on fuel taxes — in effect, a fee for using roads — as the major source of funding for highway and road construction and maintenance. But inflation and rising fuel efficiency have eroded this revenue source. Today, per vehicle mile, the gas tax produces about one-third of the revenues it produced in 1970. Partly as a result, California spent about one-third less on capital outlay per person on roads and highways in 2002 than it did 35 years earlier. Moreover, the higher costs for rights-of-way, environmental mitigation, and modern design standards mean that these dollars do not go as far as they once did. Even after adjusting for inflation, it costs over three times more to build a highway lane mile than it did in 1960. Slow roadway expansion, combined with increasing car use, has earned California’s coastal metropolitan areas the dubious distinction of ranking among the most congested places in the nation. The state also ranks second for the roughest roadways. The low investment in roads is a major concern as the state prepares for its future population growth and increases in economic activity. Planning for future road and highway work is poor because of multiple sources of funds, layers of authority, and a variety of planning procedures. In addition, the money is harder to come by today. Federal funds are not the dependable source they once were. Unlike local school bonds, local transportation sales taxes still require a two-thirds majority for passage. Attempts to raise the gas tax have proven unpopular. And while voters in 2002 approved a dedicated revenue stream for roads, the change has been all but ignored during the recent budget shortfall. Uneven jobs and population growth The concept of “smart growth” is based on the proximity of people to jobs. In other words, if the population of workers in one area exceeds the jobs available, many are forced to make longer commutes, placing greater burden on roads, air quality, and lifestyles. section 2. Where the Trends Lead p. 21 While all of California’s major urban areas are working toward “smart growth” plans, it is a difficult challenge. For one thing, it takes an extremely high population density before public transit becomes a popular mode of transportation. That kind of density is highly unlikely outside the state’s urban core — particularly with Californians’ strong preference for single-family homes. Affordability presents another challenge. California has nine of the 10 most unaffordable housing markets in the nation. That forces many homebuyers to search farther from job centers. And developers are encouraged to build in outlying areas. The consequences are long commutes for workers and the rise of “bedroom communities” and tenuous local economies. Competition or consensus Differences between various constituencies in California are growing, posing the risk of emotional and divisive battles about the state’s future course and the use of its limited resources. The imbalance between population and job growth, for example, could create rivalries among regions of the state. Most leadership positions in state government today are held by lawmakers from major population centers. Yet, the fastest growth — and the greatest need for infrastructure spending — will be in the state’s interior. The phenomenal growth of California’s senior population will also have economic, social, and political consequences. Between 2000 and 2030, the number of seniors in California is expected to double. In 2025, there will be 65 non-working children and seniors for every 100 working-age adults, an increase of 10 percent. ca2025: It’s Your Choice p. 22 FACT 07 In many of the state’s urban and coastal areas, population growth and jobs should be roughly in balance for the next two decades, but there could be an imbalance inland. FACT 08 Whites will still be a majority in the electorate in 2025, even though they will represent only a third of the population. FIGURE 6. INEQUITY IN EDUCATION AND ATTITUDES 21% 7% 72% 56% 38% 6% Percentage believing that low-income/minority neighborhoods are more likely to have schools needing repairs or replacement Yes No Don’t know Percentage believing these neighborhoods should receive more public funding for school facilities even at the expense of less funding for other school districts Figure 6. Many Californians believe education resources aren’t fairly distributed, but fewer are in favor of adjusting the balance. That shift will increase the demand for taxpayer-paid services even as the share of taxpayers is shrinking. Besides that, the fair distribution of state resources could be problematical because of the increasing share of seniors. Some commentators have expressed concern that this demographic shift could erode political support for programs targeting younger Californians, such as eduction. Seniors are more likely than younger residents to vote and to participate in socially influential organizations. The state’s electorate is also increasingly out of synch with the population because Latino and Asian American citizens are not as likely as whites to vote. In 2004, for example, whites represented just under half of the state’s population but roughly two-thirds of its electorate. Based on current trends, studies suggest whites will still be a majority of the electorate in 2025, even though they will represent about a third of the population. Finally, as in the United States as a whole, the gap between rich and poor in California has grown significantly. In fact, income inequality here is among the highest in the nation. Some of the trends that have created this gap are likely to continue — the globalization of our economy that has brought worldwide demand for goods and services by skilled workers and the growing international competition lessskilled workers face in manufacturing and production. As they do, it will be even more crucial to consider investments to improve the education of traditionally less-educated groups and to make other infrastructure improvements to create opportunities for those that have been left behind by economic growth. (Fig. 6) section 2. Where the Trends Lead p. 25 Making Choices a We’ve seen the trends. We’ve considered where they may lead. Where do we go from here? The trends and their potential consequences raise a host of issues, questions, policy options, and strong feelings among various constituencies. Above all, they underscore the urgency of making informed choices — sooner, rather than later — if we don’t want to lose control over California’s future. We cannot consider every issue, question, or option here. Nor do we have a list of quick and easy solutions to offer. There are choices to be made by Californians and their elected leaders, and selecting a course of action will involve tradeoffs. But we can prime the pump of policy debate by highlighting selected options — some suggested by the trends and directions we’ve been discussing, some by other concerned commentators on the state’s future. Here are some examples identified by issues we have raised. ca2025: It’s Your Choice p. 28 01 Invest in education now, given the potential shortage of college-educated workers in the future economy Over the last year, as they attempted to cope with California’s big budget problems without raising taxes, policymakers have given K–16 education short financial shrift in various ways. The trends indicate that this is short-term temporizing that will shoot California in the foot — economically and socially. This is one area for which the public has said it is willing to accept higher taxes. Does the political will exist in Sacramento to ask the public to ante up? p. 30 ca2025: It’s Your Choice 02 Greatly increase voter registration efforts to make voters more representative of the state’s population This isn’t pious idealism. If California wants to treat all its citizens equitably, level important playing fields, and preserve representative government, we need to get out the vote. The voice of the voter should represent all Californians proportional to their presence in the population. The state has monies for voter registration that aren’t being used for that purpose. It’s also a cause that foundations could appropriately espouse and support. 03 Make a priority of investment in low-income areas Are Californians willing to assure equity for all or will they tolerate poverty-perpetuating conditions for some? Critical overcrowding and low academic performance are more common in schools serving low-income, African American, and Latino children. In their neighborhoods, access to decent jobs, housing, medical facilities, parks and recreation, and stores and shopping is often limited. Surveys show that Californians are aware of the inequities and would support steps to resolve them. For example, 56 percent think the state should give more money to schools in such communities — even at the cost of giving less to more prosperous ones. Is the leadership in Sacramento willing to make investments in lowerincome areas their priority? 04 Use public-private partnerships for new infrastructure If federal monies aren’t available or dry up, one place to look for infrastructure funding is through public-private partnerships. The University of California provides a compelling example of the effectiveness of such partnerships to find infrastructure funding. In partnership with private companies, UC Irvine, for example has created a 1,100-unit housing development on the campus. Its UC Irvine Research Park is leased to the Irvine Corporation, which leases sites to research-oriented companies that are interested in linking up with university researchers, participating in university research projects, and offering internships to UCI students. The trend to university-private industry partnerships is growing across the state. Then-Governor Davis created an initiative that would establish four new science institutes at four UC campuses by leveraging state funding with private investment. This is a model the state could use in other areas of infrastructure building. 05 Rely on demand management and conservation for maintaining infrastructure Californians resist more building to meet the projected demands of a growing population on at least two grounds: They don’t want their taxes raised and they don’t want facilities built in their backyards. Borrowing is one alternative to raising taxes. But California already has such a high debt load that General Fund revenues devoted to debt service rose from 3 percent in 2002 to 7 percent in 2005 — a percentage considered financially dangerous by some experts. Under the circumstances, the most feasible alternative is to manage demand and encourage conservation, as well as increasing supply strategically. Examples of demand management would be fostering water conservation in the urban and agricultural sectors; implementing road pricing to mitigate traffic congestion; and encouraging carpooling, off-peak travel, mass transit, and other forms of travel besides driving alone. In the case of higher education, operating year-round could increase the number of students accommodated by as much as one-third, saving billions of dollars. Students might also move more briskly through college if student loans were more costly or fees were higher for those who don’t finish in reasonable time. 06 Extend term limits to change the context of long-term planning in the legislature One thing that makes long-term planning difficult for lawmakers is that it requires spending money or making sacrifices today for benefits that may not be realized until term limits force the lawmaker out of office. The decisions also require leadership that can articulate a vision and inspire support for it. Partisanship and lack of public trust for elected officials make that job exceedingly hard. Under term limits, lawmakers are less experienced and special interests are more powerful than before. 07 Encourage localities to think and act regionally On some dimensions, planning to meet population growth is the prisoner of competing authorities at the state, local, and regional level. Local government determines the best development for its community. Regional organizations coordinate housing, transportation, and jobs. State authorities seek a fair distribution of affordable housing, infrastructure, and costs. But instead of collaborating, state and local governments today are adversarial, and regional groups have little authority. The result is a lack of planning and enforcement of, for example, housing goals. To encourage regional planning and action, the state could help align local and regional objectives, planning mechanisms, and incentives. It could also create incentives by rewarding jurisdictions that promote the objectives. Effective “carrots” could be preferential access to loans, grants, or infrastructure improvements and new revenue-raising authority to fund improvements. section 3. Making Choices p. 33 08 Revisit Proposition 13 Without the landmark 1978 initiative that capped property tax hikes, many homeowners today might be forced to move as the value of their homes skyrockets. But Proposition 13 had many unintended fiscal consequences. One reason for the skyrocketing home prices is that property tax reduction discourages local government from approving new home development. It costs them more in service provision for households than they can realize in taxes. Some critics also contend that the supporters of Proposition 13 did not intend to put the same constrictions on corporate property tax that they imposed on residential property tax. 09 Increase the transparency and accountability of the state-local fiscal system $$ The current state-local fiscal system needs overhauling — if for no other reason than making local residents aware of where their property tax dollars go and what their local governments can actually provide in the way of infrastructure and other services. County governments are tasked with providing much of this. Yet, Proposition 13 and its progeny have severely limited their ability to raise revenues to cover the cost. The counties’ ability to cope has been further eroded as the federal government devolved more responsibility to the state and the state to the counties. In both cases, funds earmarked to cover mandated responsibilities are often inadequate. Reforming the state-local fiscal system could provide greater certainty about who will pay for what and how it will be delivered to the public most efficiently and effectively. Greater fiscal certainty and transparency might also go far in reducing public distrust. 10 Reduce the supermajority requirements for local revenue raising Local governments are responsible for funding many of the investments necessary to support California’s growth. Yet the two-thirds supermajority requirement for local taxes and bonds severely limits their authority to raise new revenues. Lowering that requirement could also take off some of the pressure for funding from the state caused by declines in federal funding. When the threshold for passing local school bonds was lowered to 55 percent in 2000, it generated an additional $10 billion for K–12 construction and nearly $7 billion for community colleges. section 3. Making Choices p. 35 ++++ The options we’ve laid out here could create a more enabling context for policymaking, save money in some cases, and generate more in others. And more options have been broached or could be developed. Many of them, however, require sacrifices, changes in cultures and lifestyle, and an ability to look beyond immediate needs and comforts for the sake of the state’s future. Nobody said it was going to be easy. The crucial question is whether Californians care enough to make the effort. ca2025: It’s Your Choice p. 36 RELATED PPIC PUBLICATIONS Other Publications of the California 2025 Project California 2025: Taking on the Future Ellen Hanak and Mark Baldassare, eds. California Comes of Age: Governing Institutions, Planning, and Public Investment Elisa Barbour and Paul Lewis California’s Economic Future and Infrastructure Challenges David Neumark PPIC Statewide Survey: Special Survey on Californians and the Future, August 2004 Mark Baldassare Sizing up the Challenge: California’s Infrastructure Needs and Tradeoffs Ellen Hanak and Elisa Barbour Understanding Equitable Infrastructure Investment for California Manuel Pastor and Deborah Reed Understanding Infrastructure Financing for California Shelley de Alth and Kim Rueben California Counts: Population Trends and Profiles A State of Diversity: Demographic Trends in California’s Regions Hans Johnson Educational Resources and Outcomes in California, by Race and Ethnicity Deborah Reed Graying in the Golden State: Demographic and Economic Trends of Older Californians Sonya Tafoya and Hans Johnson Movin’ Out: Domestic Migration to and from California in the 1990s Hans Johnson Recent Trends in Income and Poverty Deborah Reed Just the Facts Topics of these fact sheets on California’s future include population and economic growth, infrastructure financing, water, education, and transportation. PPIC Reports A California State of Mind: The Conflicted Voter in a Changing World Mark Baldassare Adapting to Term Limits: Recent Experiences and New Directions Bruce Cain and Thad Kousser Building California’s Future: Current Conditions in Infrastructure Planning, Budgeting, and Financing Michael Neuman and Jan Whittington ca2025: It’s Your Choice p. 38 California’s Newest Immigrants Laura Hill and Joseph Hayes Cities Under Pressure: Local Growth Controls and Residential Development Policy Paul Lewis and Max Neiman English Learners in California Schools Christopher Jepsen and Shelley de Alth Fiscal Effects of Voter Approval Requirements on Local Governments Kim Rueben and Pedro Cerdán High Expectations, Modest Means: The Challenge Facing California’s Public Schools Heather Rose, et al. How Race, Ethnicity, and Immigration Shape the California Electorate Jack Citrin and Benjamin Highton In Short Supply? Cycles and Trends in California Housing Hans Johnson, et al. Making Room for the Future: Rebuilding California’s Infrastructure David Dowall and Jan Whittington Planned Developments in California: Private Communities and Public Life Tracy Gordon Racial and Ethnic Wage Gaps in the California Labor Market Deborah Reed and Jennifer Chang The Central Valley at a Crossroads: Migration and Its Implications Hans Johnson and Joseph Hayes The Changing Role of Education in the California Labor Market Julian Betts The Socio-Economic Well-Being of California’s Immigrant Youth Laura Hill Urban Development Futures in the San Joaquin Valley Michael Teitz, et al. Water for Growth: California’s New Frontier, forthcoming Ellen Hanak Who Should Be Allowed to Sell Water in California: Third-Party Issues and the Water Market Ellen Hanak PPIC Statewide Surveys Special Survey on Californians and Their Housing, November 2004 Special Survey on Land Use, November 2002 Related PPIC Publications p. 39 p. 40 ca2025: It’s Your Choice PUBLIC POLICY INSTITUTE OF CALIFORNIA Board of Directors Thomas C. Sutton, Chair Chairman and CEO Pacific Life Insurance Company Edward K. Hamilton Chairman Hamilton, Rabinovitz & Alschuler, Inc. Gary K. Hart Founder Institute for Education Reform California State University, Sacramento Walter B. Hewlett Director Center for Computer Assisted Research in the Humanities David W. Lyon President and CEO Public Policy Institute of California Cheryl White Mason Vice-President Litigation Legal Department Hospital Corporation of America Arjay Miller Dean Emeritus Graduate School of Business Stanford University Ki Suh Park Design and Managing Partner Gruen Associates Constance L. Rice Co-Director The Advancement Project Raymond L. Watson Vice Chairman of the Board Emeritus The Irvine Company Carol Whiteside President Great Valley Center Advisory Council Clifford W. Graves General Manager Department of Community Development City of Los Angeles Elizabeth G. Hill Legislative Analyst State of California Hilary W. Hoynes Associate Professor Department of Economics University of California, Davis Andrés E. Jiménez Director California Policy Research Center University of California Office of the President Norman R. King Executive Director San Bernardino Associated Governments Daniel A. Mazmanian C. Erwin and Ione Piper Dean and Professor School of Policy, Planning, and Development University of Southern California Dean Misczynski Director California Research Bureau Rudolf Nothenberg Chief Administrative Officer (Retired) City and County of San Francisco Manuel Pastor Professor, Latin American & Latino Studies University of California, Santa Cruz Peter Schrag Contributing Editor The Sacramento Bee James P. Smith Senior Economist RAND Corporation This project used 9,562.22 pounds of 100% post-consumer paper manufactured with wind power. Savings derived from using postconsumer recycled fiber in lieu of virgin fiber: 114.74 trees not cut down 331.34 lbs. waterborne waste not created 48,741.54 gallons water/wastewater flow saved 5,171.30 lbs. soild waste not generated 10,106.63 lbs. atmospheric emissions eliminated 66,051,323.54 BTUs energy not consumed Savings derived from choosing a paper manufactured entirely with wind energy: 1,428.45 lbs. air emissions not generated This amount of wind energy is equivalent to: 96.7 trees being planted 1,593.70 miles not traveled in an average automobile 5,311.82 cubic feet natural gas This publication is printed on FSC certified Mohawk Options, 100% PC White manufactured entirely with wind energy and contains 100% postconsumer recycled fiber. This paper is certified by Green Seal, and by SmartWood for FSC standards which promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. Design: Chen Design Associates / Photography: Joseph Squillante, Photonica (pp. 2-3) / Printing: Cenveo Copyright © 2005 by Public Policy Institute of California. All rights reserved. San Francisco, CA Short sections of text, not to exceed three paragraphs, may be quoted without written permission provided that full attribution is given to the source and the above copyright notice is included. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office. Research publications reflect the views of the authors and do not necessarily reflect the views of the staff, officers, or Board of Directors of the Public Policy Institute of California. Public Policy Institute of California + 500 Washington Street, Suite 800 + San Francisco, CA 94111 + p/ 415 291 4400 + f/ 415 291 4401 + www.ppic.org + www.ca2025.org" } ["___content":protected]=> string(104) "

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" ["_permalink":protected]=> string(75) "https://www.ppic.org/publication/california-2025-its-your-choice/r_605mb1r/" ["_next":protected]=> array(0) { } ["_prev":protected]=> array(0) { } ["_css_class":protected]=> NULL ["id"]=> int(8473) ["ID"]=> int(8473) ["post_author"]=> string(1) "1" ["post_content"]=> string(0) "" ["post_date"]=> string(19) "2017-05-20 02:37:53" ["post_excerpt"]=> string(0) "" ["post_parent"]=> int(3681) ["post_status"]=> string(7) "inherit" ["post_title"]=> string(9) "R 605MB1R" ["post_type"]=> string(10) "attachment" ["slug"]=> string(9) "r_605mb1r" ["__type":protected]=> NULL ["_wp_attached_file"]=> string(13) "R_605MB1R.pdf" ["wpmf_size"]=> string(7) "6295986" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(41205) "Public Policy Institute of California Mark It’s Your CBaldassare/ Ellen hoiceHanak The California 2025 project was supported with funding from the William and Flora Hewlett Foundation. The Public Policy Institute of California (PPIC) is a private operating foundation established in 1994 with an endowment from William R. Hewlett. The Institute is dedicated to improving public policy in California through independent, objective, nonpartisan research. What kind of California do you want? The Challenge California is being reshaped by a changing population, a globalizing economy, and fantastic new technologies that are redefining our relationships and our sense of geography. The grand universities, highways, and water systems that fueled prosperity for recent generations are now stretched beyond their capacities. The reforms most critically needed are threatened by major obstacles in leadership and governance, finance and equity, influence and participation. We haven’t reached a crisis point, but trends and forces are gathering that could seriously erode the quality of life in California in the next two decades. Thoughtful, systematic action is needed. If we don’t make careful choices now, the future we get by default may not be our worst nightmare, but it probably won’t be the brightest dream for ourselves, our children, and our grandchildren. We should make no mistake — this isn’t someone else’s problem or responsibility. All Californians have a stake in this. And all Californians with the ability to influence the policies and programs needed to secure our future must understand the problems and options and make their voices heard. CA2025: It’s Your Choice is a starting point. It describes facts about our population, our economy, and our physical structures so that we can start a discussion about the future from the same page, beginning with this question: What kind of California do you want? It’s a simple question that is extremely hard to answer. To reach a common future that reflects our regional, financial, and ethnic differences will require tough choices about sacrifices to be made and higher prices to pay. Not least important, the long-range view of California’s future presented here helps illustrate how short-term gains for one group today can jeopardize long-term opportunities for all groups in the future. ca2025: It’s Your Choice p. 04 A larger, more diverse population Looking ahead, the critical issues about California’s population will continue to be its size and diversity. In terms of size, the most rapid change has already occurred. But the population continues to change based on trends set in motion in recent years. Since 1960, the state’s population has more than doubled, reaching 36.5 million by mid-2004. During the 20th century, no other developed region of the world experienced population growth rates as great as California’s. Indeed, California’s growth rates more closely resemble those of a less-developed country. Meeting the first-world demands of a population with such rapid growth rates presents a formidable challenge. Equally remarkable? The diversity of California’s population growth.Today, California is home to sizable immigrant communities from more than 60 different countries, arguably making California’s population the most diverse in the world. Whites, who represented 80 percent of the population in 1970, are just under half today and will be about a third by 2025. Latinos, meanwhile, will represent nearly half of the state by 2025. (fig. 1) Another significant demographic change is the aging of California’s population. Demographers project that the number of seniors in California will more than double in a little more than a generation. By 2025, about one in every seven Californians will be over the age of 65. At the other age extreme, and of even greater importance p. 05 section 1. The Challenge FACT 01 In 2025, 30% of Californians will be foreign born. Almost half will be Latino. One in seven will be over 65. because of education expenditures, the child population of California is expected to change very little over the next 10 years. While the population continues to increase, the days of its exploding growth may be over. Experts have recently scaled back their predictions for California’s growth, with important implications for schools, highways, housing, and other infrastructure categories. All of the state’s major university and government researchers made the same recalculations after determining that fertility rates for California women are dropping faster than expected and that immigration has subsided. In hindsight, they find that California’s unusually high population growth rate actually peaked in 1989 and is expected to be closer to the national average in the future. Today, most demographers predict California’s population will be between 44 million and 48 million in 2025. (fig. 2) But the growth in the state will not be the same everywhere, meaning that some regions will have much greater infrastructure needs than others. Many inland counties from Riverside to Sacramento are expected to grow by 50 percent between 2005 and 2025. One of the fastest growing metropolitan areas in the United States, the Inland Empire, now has a larger population than metropolitan St. Louis or Denver. In coming years, growth rates in the northern San Joaquin Valley are expected to equal the experience in the Inland Empire. Meanwhile, more than 60 percent of the state’s population will continue to live in coastal areas, as cities like Los Angeles and San Francisco keep growing, although not as fast as the inland counties. Even though growth will not be as phenomenal as in the past, it is still daunting to consider the planning and construction needed over the next 20 years to add a population about the size of Ohio — the nation’s sixth largest state. And the demand for infrastructure is not driven only by future growth. The state’s systems are still catching up with the backlog of demands generated by the population explosion of the 1970s and 1980s. population in millions section 1. The Challenge FIGURE 1. POPULATION PROJECTIONS BY ETHNICITY 10 2000 8 2020 6 4 2 0 population in millions FIGURE 2. POPULATION PROJECTIONS FOR CALIFORNIA 50 Figure 1. 40 California’s population will become increasingly diverse. high estimate low estimate Figure 2. By 2025, California will have between 30 7 million and 11 million more people than today. p. 07 2000 2005 2010 2015 2020 2025 Other Asian American White Latino Af. p. 08 ca2025: It’s Your Choice Population projections are based on current trends, and experts warn that the state’s long-term demographic profile remains volatile. There are questions about the state’s demographic future that will be determined by trends in the economy — for example, availability and quality of jobs. During the 1990s, recession slowed foreign immigration and caused so many residents to leave the state that New York City actually grew faster than Los Angeles for the first time in nearly 150 years. Now, the key question for prognosticators is whether California will become the next demographic New York — a place of slow population growth in which thousands of international migrants arrive each year while thousands of domestic migrants leave. Or will California return to the population growth patterns that have characterized so much of its history, attracting migrants both internationally and domestically? A new economy The answer to that question is likely to be determined by the shape of the state’s future economy. California’s economic engine is expected to grow and change remarkably. The state is already ranked by many as the fifth largest economy in the world. Between 2000 and 2020, the workforce is projected to grow by more than 30 percent, to a total of roughly 20 million jobs. Almost 1 million new workers will be added in the Bay Area and perhaps 2–3 million more around Los Angeles, which will be home to half the state’s workforce. In percentage terms, the growth rate could even be higher in San Diego and the Central Valley. California will also continue its shift from a manufacturing jobs base to one driven by services industries. By 2020, a sizeable majority of workers in California will be employed in service-oriented industries. At the same time, manufacturing jobs, as a share of state employment, will drop by at least 25 percent. (fig. 3) Although services put less burden than manufacturing on roads, water facilities, and physical structures, this economic shift poses a crucial challenge for the future. Many people, if not most, see service-oriented industries as the domain of less-educated, low-wage workers. But service employment includes business, professional, entertainment, recreation, health, and educational activities. Compared to manufacturing, these require higher levels of education. FACT 02 By 2020, the workforce is projected to grow by more than 30%. FACT 03 77% of Californians have only some or very little confidence in their state government’s ability to plan for the future. percent share of total employment FIGURE 3. INDUSTRY PROJECTIONS FOR CALIFORNIA 40 35 30 25 20 15 10 5 0 Manufacturing Services 2000 2020 Figure 3. Future job growth will be driven by the services sector as manufacturing declines. The critical question is whether California can produce or attract the educated workforce this shift requires. The changing demographic mix of the population could work in the other direction because most population growth will be among groups that have historically had less education. produced a host of changes: Proposition 13 and its progeny; super-majority requirements for raising revenues; anti-tax sentiment in general; term limits; and a belief in and growing use of the initiative process, which allows a disenchanted public to exercise its preference for making policy at the ballot box. A changing context for planning Besides the size of the population, another major challenge is its mindset. A very large proportion of Californians deeply distrust government and those who govern. They have little faith in either the good faith or the competence of their elected officials. That distrust and a growing fiscal conservatism have All these things make consensus building and planning for the future much more difficult than they were during the great building years of the mid-20th century. Those who believe that what California needs to meet future challenges is another great leader, a reincarnation of Governor Pat Brown, if you will, are not realistic about how the context of governance and planning has changed. section 1. The Challenge p. 11 Where the Trends Lead section 1. Where the trends lead p. 00 One of the most threatening trends is the potential mismatch between the education requirements of the new economy and the amount of education its future population is likely to have. numbers represent percentages FIGURE 4. PERCENT DISTRIBUTION BY EDUCATIONAL ATTAINMENT, 2020 40 35 30 25 20 15 10 5 0 less than high high school school graduate graduate some college college graduate labor force demand population supply Figure 4. If current patterns persist, the Calfornia economy will require more highly educated workers than the state may be able to provide. The shift from a manufacturing base to one far more dependent on services will require a more educated workforce. Today, workers in most service-oriented industries are at least twice as likely as manufacturing employees to have graduated from high school. Indeed, the fastest growing service-oriented industries have the highest share of employees with college degrees. The problem is that education trends in California are not projected to keep pace because population growth is concentrated among groups that have typically attained lower levels of education. Immigrants and the children of immigrants — primarily Mexican ca2025: It’s Your Choice p. 14 section 2. Where the Trends Lead Americans — will make up a large percentage of the 2025 working-age population. Up to now, this group has been among the least likely to finish high school or to attend or finish college. If the trends continue, there will be a gap between the number of college graduates demanded by the state’s economy and the number of Californians with college degrees. If the gap doesn’t narrow, and if the California working-age population doesn’t have the education required by jobs in the 2025 economy, will we have a generation of chronic underemployed, who will need the state’s social and income-transfer programs? Can we make up the labor force needs by continuing to attract more highly educated people from other states and countries? Or will they be attracted to other parts of the country where the demand for highly educated workers will also be growing? p. 15 FACT By 2025, the college age population — 18 to 24 year olds — 04 will have increased by more than 800,000. If we don’t have the educated workforce we need, we’re potentially in a double bind: Where will the tax revenues come from to fund the transfer programs or to keep roads repaired, water clean and flowing, and schools running? Is it likely that the growing proportion of older people will be a source of high tax revenues? It is particularly ironic that as the state seeks to cope with its budget woes, we may be limiting access to our public institutions of higher education, thereby potentially limiting the source of higher tax revenues from the working population in the future. Besides these concerns, if California cannot provide the educated workforce required, companies might leave the state to meet their requirements or may be forced to hire increasingly from outside the state. Or key industries may falter, leaving business and workers at risk. Reversing the trend will test the public’s commitment to education. And Californians have shown strong support for education. Schools have been at or near the top of the priority list for California voters during the past several years. They’ve pressured lawmakers to make dramatic reforms and have also lowered the threshold for approval of local school bonds from two-thirds to 55 percent. As a result, since 2000, an unprecedented $42 billion in state and local borrowing has been directed at K–12 schools. Although these bond funds will go a long way toward meeting the backlog of unmet needs and making room for growth, more funds are likely to be required to provide a decent learning environment for all California’s children. Some state bond funds are earmarked to school districts facing hardships. However, more could be done to address their special problems. In higher education, thanks to state and local bonds and private contributions, the money for buildings and classroom space is adequate for much of the expansion required over the next decade. But because of recent budget cuts, universities are left without enough operating funds to teach all of the eligible students. In 2004, 7000 youth were initially turned away from the University of California. Had they not been admitted eventually, this would have been the UC system’s firstever violation of the 1960 Master Plan for Education. Spending cuts and fee hikes have also led to enrollment drops in the California Community Colleges, which serve the most economically vulnerable populations. A failure of California’s education system to deliver the workforce it needs is the most critical threat to the future, but there is also considerable work necessary to expand water and transportation facilities and make more efficient use of the facilities in place. Infrastructure needs are also not spread evenly. Part of the challenge for the future is to balance demographic and social trends against the fair distribution of resources. p. 17 section 2. Where the Trends Lead Shrinking resources and growing demand Experts have scaled back their forecasts for the state’s water needs because of lower population projections and an expected reduction in agriculture as Central Valley farms give way to new homes. Still, the demand is going up and the supply is actually shrinking. In 2000, roughly one acre-foot of water would supply four Californians for a year. With current trends, experts say the state needs about 3.1 million acre-feet of new water by 2030 to accommodate the expected population growth. Some additional resources are needed to support endangered wildlife and to make up for cutbacks in California’s use of the Colorado River, as some neighboring states begin to use their full share. To reverse the trends, experts say water conservation is essential. Water metering and other policies could actually resolve up to half of the need for new water sources. These and other innovative solutions, including desalination, wastewater recycling, and the sale of some farm water to cities, may offer more promise than building large new water storage facilities — the predominant model of the 20th century. Fuel efficiency and outdated policies Fuel-efficient cars like hybrids could improve the future in California by cutting air pollution and reducing the economy’s dependence on fuel prices. Ironically, however, absent effective policy response, greater fuel economy could have ominous consequences for transportation investments. (Fig. 5) ca2025: It’s Your Choice p. 18 FACT 05 Municipal water use could expand by 3.1 million acre-feet over the next 25 years. FACT 06 Congestion will cause travel time in the state to increase by 48%. numbers represent percentages FIGURE 5. GROWTH IN POPULATION AND VEHICLE MILES TRAVELED ON STATE HIGHWAYS IN CALIFORNIA 500 vehicle miles traveled 400 on state highways population 300 200 100 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Figure 5. Miles traveled will outstrip population growth, putting greater strain on roads and highways. Historically, California has relied heavily on fuel taxes — in effect, a fee for using roads — as the major source of funding for highway and road construction and maintenance. But inflation and rising fuel efficiency have eroded this revenue source. Today, per vehicle mile, the gas tax produces about one-third of the revenues it produced in 1970. Partly as a result, California spent about one-third less on capital outlay per person on roads and highways in 2002 than it did 35 years earlier. Moreover, the higher costs for rights-of-way, environmental mitigation, and modern design standards mean that these dollars do not go as far as they once did. Even after adjusting for inflation, it costs over three times more to build a highway lane mile than it did in 1960. Slow roadway expansion, combined with increasing car use, has earned California’s coastal metropolitan areas the dubious distinction of ranking among the most congested places in the nation. The state also ranks second for the roughest roadways. The low investment in roads is a major concern as the state prepares for its future population growth and increases in economic activity. Planning for future road and highway work is poor because of multiple sources of funds, layers of authority, and a variety of planning procedures. In addition, the money is harder to come by today. Federal funds are not the dependable source they once were. Unlike local school bonds, local transportation sales taxes still require a two-thirds majority for passage. Attempts to raise the gas tax have proven unpopular. And while voters in 2002 approved a dedicated revenue stream for roads, the change has been all but ignored during the recent budget shortfall. Uneven jobs and population growth The concept of “smart growth” is based on the proximity of people to jobs. In other words, if the population of workers in one area exceeds the jobs available, many are forced to make longer commutes, placing greater burden on roads, air quality, and lifestyles. section 2. Where the Trends Lead p. 21 While all of California’s major urban areas are working toward “smart growth” plans, it is a difficult challenge. For one thing, it takes an extremely high population density before public transit becomes a popular mode of transportation. That kind of density is highly unlikely outside the state’s urban core — particularly with Californians’ strong preference for single-family homes. Affordability presents another challenge. California has nine of the 10 most unaffordable housing markets in the nation. That forces many homebuyers to search farther from job centers. And developers are encouraged to build in outlying areas. The consequences are long commutes for workers and the rise of “bedroom communities” and tenuous local economies. Competition or consensus Differences between various constituencies in California are growing, posing the risk of emotional and divisive battles about the state’s future course and the use of its limited resources. The imbalance between population and job growth, for example, could create rivalries among regions of the state. Most leadership positions in state government today are held by lawmakers from major population centers. Yet, the fastest growth — and the greatest need for infrastructure spending — will be in the state’s interior. The phenomenal growth of California’s senior population will also have economic, social, and political consequences. Between 2000 and 2030, the number of seniors in California is expected to double. In 2025, there will be 65 non-working children and seniors for every 100 working-age adults, an increase of 10 percent. ca2025: It’s Your Choice p. 22 FACT 07 In many of the state’s urban and coastal areas, population growth and jobs should be roughly in balance for the next two decades, but there could be an imbalance inland. FACT 08 Whites will still be a majority in the electorate in 2025, even though they will represent only a third of the population. FIGURE 6. INEQUITY IN EDUCATION AND ATTITUDES 21% 7% 72% 56% 38% 6% Percentage believing that low-income/minority neighborhoods are more likely to have schools needing repairs or replacement Yes No Don’t know Percentage believing these neighborhoods should receive more public funding for school facilities even at the expense of less funding for other school districts Figure 6. Many Californians believe education resources aren’t fairly distributed, but fewer are in favor of adjusting the balance. That shift will increase the demand for taxpayer-paid services even as the share of taxpayers is shrinking. Besides that, the fair distribution of state resources could be problematical because of the increasing share of seniors. Some commentators have expressed concern that this demographic shift could erode political support for programs targeting younger Californians, such as eduction. Seniors are more likely than younger residents to vote and to participate in socially influential organizations. The state’s electorate is also increasingly out of synch with the population because Latino and Asian American citizens are not as likely as whites to vote. In 2004, for example, whites represented just under half of the state’s population but roughly two-thirds of its electorate. Based on current trends, studies suggest whites will still be a majority of the electorate in 2025, even though they will represent about a third of the population. Finally, as in the United States as a whole, the gap between rich and poor in California has grown significantly. In fact, income inequality here is among the highest in the nation. Some of the trends that have created this gap are likely to continue — the globalization of our economy that has brought worldwide demand for goods and services by skilled workers and the growing international competition lessskilled workers face in manufacturing and production. As they do, it will be even more crucial to consider investments to improve the education of traditionally less-educated groups and to make other infrastructure improvements to create opportunities for those that have been left behind by economic growth. (Fig. 6) section 2. Where the Trends Lead p. 25 Making Choices a We’ve seen the trends. We’ve considered where they may lead. Where do we go from here? The trends and their potential consequences raise a host of issues, questions, policy options, and strong feelings among various constituencies. Above all, they underscore the urgency of making informed choices — sooner, rather than later — if we don’t want to lose control over California’s future. We cannot consider every issue, question, or option here. Nor do we have a list of quick and easy solutions to offer. There are choices to be made by Californians and their elected leaders, and selecting a course of action will involve tradeoffs. But we can prime the pump of policy debate by highlighting selected options — some suggested by the trends and directions we’ve been discussing, some by other concerned commentators on the state’s future. Here are some examples identified by issues we have raised. ca2025: It’s Your Choice p. 28 01 Invest in education now, given the potential shortage of college-educated workers in the future economy Over the last year, as they attempted to cope with California’s big budget problems without raising taxes, policymakers have given K–16 education short financial shrift in various ways. The trends indicate that this is short-term temporizing that will shoot California in the foot — economically and socially. This is one area for which the public has said it is willing to accept higher taxes. Does the political will exist in Sacramento to ask the public to ante up? p. 30 ca2025: It’s Your Choice 02 Greatly increase voter registration efforts to make voters more representative of the state’s population This isn’t pious idealism. If California wants to treat all its citizens equitably, level important playing fields, and preserve representative government, we need to get out the vote. The voice of the voter should represent all Californians proportional to their presence in the population. The state has monies for voter registration that aren’t being used for that purpose. It’s also a cause that foundations could appropriately espouse and support. 03 Make a priority of investment in low-income areas Are Californians willing to assure equity for all or will they tolerate poverty-perpetuating conditions for some? Critical overcrowding and low academic performance are more common in schools serving low-income, African American, and Latino children. In their neighborhoods, access to decent jobs, housing, medical facilities, parks and recreation, and stores and shopping is often limited. Surveys show that Californians are aware of the inequities and would support steps to resolve them. For example, 56 percent think the state should give more money to schools in such communities — even at the cost of giving less to more prosperous ones. Is the leadership in Sacramento willing to make investments in lowerincome areas their priority? 04 Use public-private partnerships for new infrastructure If federal monies aren’t available or dry up, one place to look for infrastructure funding is through public-private partnerships. The University of California provides a compelling example of the effectiveness of such partnerships to find infrastructure funding. In partnership with private companies, UC Irvine, for example has created a 1,100-unit housing development on the campus. Its UC Irvine Research Park is leased to the Irvine Corporation, which leases sites to research-oriented companies that are interested in linking up with university researchers, participating in university research projects, and offering internships to UCI students. The trend to university-private industry partnerships is growing across the state. Then-Governor Davis created an initiative that would establish four new science institutes at four UC campuses by leveraging state funding with private investment. This is a model the state could use in other areas of infrastructure building. 05 Rely on demand management and conservation for maintaining infrastructure Californians resist more building to meet the projected demands of a growing population on at least two grounds: They don’t want their taxes raised and they don’t want facilities built in their backyards. Borrowing is one alternative to raising taxes. But California already has such a high debt load that General Fund revenues devoted to debt service rose from 3 percent in 2002 to 7 percent in 2005 — a percentage considered financially dangerous by some experts. Under the circumstances, the most feasible alternative is to manage demand and encourage conservation, as well as increasing supply strategically. Examples of demand management would be fostering water conservation in the urban and agricultural sectors; implementing road pricing to mitigate traffic congestion; and encouraging carpooling, off-peak travel, mass transit, and other forms of travel besides driving alone. In the case of higher education, operating year-round could increase the number of students accommodated by as much as one-third, saving billions of dollars. Students might also move more briskly through college if student loans were more costly or fees were higher for those who don’t finish in reasonable time. 06 Extend term limits to change the context of long-term planning in the legislature One thing that makes long-term planning difficult for lawmakers is that it requires spending money or making sacrifices today for benefits that may not be realized until term limits force the lawmaker out of office. The decisions also require leadership that can articulate a vision and inspire support for it. Partisanship and lack of public trust for elected officials make that job exceedingly hard. Under term limits, lawmakers are less experienced and special interests are more powerful than before. 07 Encourage localities to think and act regionally On some dimensions, planning to meet population growth is the prisoner of competing authorities at the state, local, and regional level. Local government determines the best development for its community. Regional organizations coordinate housing, transportation, and jobs. State authorities seek a fair distribution of affordable housing, infrastructure, and costs. But instead of collaborating, state and local governments today are adversarial, and regional groups have little authority. The result is a lack of planning and enforcement of, for example, housing goals. To encourage regional planning and action, the state could help align local and regional objectives, planning mechanisms, and incentives. It could also create incentives by rewarding jurisdictions that promote the objectives. Effective “carrots” could be preferential access to loans, grants, or infrastructure improvements and new revenue-raising authority to fund improvements. section 3. Making Choices p. 33 08 Revisit Proposition 13 Without the landmark 1978 initiative that capped property tax hikes, many homeowners today might be forced to move as the value of their homes skyrockets. But Proposition 13 had many unintended fiscal consequences. One reason for the skyrocketing home prices is that property tax reduction discourages local government from approving new home development. It costs them more in service provision for households than they can realize in taxes. Some critics also contend that the supporters of Proposition 13 did not intend to put the same constrictions on corporate property tax that they imposed on residential property tax. 09 Increase the transparency and accountability of the state-local fiscal system $$ The current state-local fiscal system needs overhauling — if for no other reason than making local residents aware of where their property tax dollars go and what their local governments can actually provide in the way of infrastructure and other services. County governments are tasked with providing much of this. Yet, Proposition 13 and its progeny have severely limited their ability to raise revenues to cover the cost. The counties’ ability to cope has been further eroded as the federal government devolved more responsibility to the state and the state to the counties. In both cases, funds earmarked to cover mandated responsibilities are often inadequate. Reforming the state-local fiscal system could provide greater certainty about who will pay for what and how it will be delivered to the public most efficiently and effectively. Greater fiscal certainty and transparency might also go far in reducing public distrust. 10 Reduce the supermajority requirements for local revenue raising Local governments are responsible for funding many of the investments necessary to support California’s growth. Yet the two-thirds supermajority requirement for local taxes and bonds severely limits their authority to raise new revenues. Lowering that requirement could also take off some of the pressure for funding from the state caused by declines in federal funding. When the threshold for passing local school bonds was lowered to 55 percent in 2000, it generated an additional $10 billion for K–12 construction and nearly $7 billion for community colleges. section 3. Making Choices p. 35 ++++ The options we’ve laid out here could create a more enabling context for policymaking, save money in some cases, and generate more in others. And more options have been broached or could be developed. Many of them, however, require sacrifices, changes in cultures and lifestyle, and an ability to look beyond immediate needs and comforts for the sake of the state’s future. Nobody said it was going to be easy. The crucial question is whether Californians care enough to make the effort. ca2025: It’s Your Choice p. 36 RELATED PPIC PUBLICATIONS Other Publications of the California 2025 Project California 2025: Taking on the Future Ellen Hanak and Mark Baldassare, eds. California Comes of Age: Governing Institutions, Planning, and Public Investment Elisa Barbour and Paul Lewis California’s Economic Future and Infrastructure Challenges David Neumark PPIC Statewide Survey: Special Survey on Californians and the Future, August 2004 Mark Baldassare Sizing up the Challenge: California’s Infrastructure Needs and Tradeoffs Ellen Hanak and Elisa Barbour Understanding Equitable Infrastructure Investment for California Manuel Pastor and Deborah Reed Understanding Infrastructure Financing for California Shelley de Alth and Kim Rueben California Counts: Population Trends and Profiles A State of Diversity: Demographic Trends in California’s Regions Hans Johnson Educational Resources and Outcomes in California, by Race and Ethnicity Deborah Reed Graying in the Golden State: Demographic and Economic Trends of Older Californians Sonya Tafoya and Hans Johnson Movin’ Out: Domestic Migration to and from California in the 1990s Hans Johnson Recent Trends in Income and Poverty Deborah Reed Just the Facts Topics of these fact sheets on California’s future include population and economic growth, infrastructure financing, water, education, and transportation. PPIC Reports A California State of Mind: The Conflicted Voter in a Changing World Mark Baldassare Adapting to Term Limits: Recent Experiences and New Directions Bruce Cain and Thad Kousser Building California’s Future: Current Conditions in Infrastructure Planning, Budgeting, and Financing Michael Neuman and Jan Whittington ca2025: It’s Your Choice p. 38 California’s Newest Immigrants Laura Hill and Joseph Hayes Cities Under Pressure: Local Growth Controls and Residential Development Policy Paul Lewis and Max Neiman English Learners in California Schools Christopher Jepsen and Shelley de Alth Fiscal Effects of Voter Approval Requirements on Local Governments Kim Rueben and Pedro Cerdán High Expectations, Modest Means: The Challenge Facing California’s Public Schools Heather Rose, et al. How Race, Ethnicity, and Immigration Shape the California Electorate Jack Citrin and Benjamin Highton In Short Supply? Cycles and Trends in California Housing Hans Johnson, et al. Making Room for the Future: Rebuilding California’s Infrastructure David Dowall and Jan Whittington Planned Developments in California: Private Communities and Public Life Tracy Gordon Racial and Ethnic Wage Gaps in the California Labor Market Deborah Reed and Jennifer Chang The Central Valley at a Crossroads: Migration and Its Implications Hans Johnson and Joseph Hayes The Changing Role of Education in the California Labor Market Julian Betts The Socio-Economic Well-Being of California’s Immigrant Youth Laura Hill Urban Development Futures in the San Joaquin Valley Michael Teitz, et al. Water for Growth: California’s New Frontier, forthcoming Ellen Hanak Who Should Be Allowed to Sell Water in California: Third-Party Issues and the Water Market Ellen Hanak PPIC Statewide Surveys Special Survey on Californians and Their Housing, November 2004 Special Survey on Land Use, November 2002 Related PPIC Publications p. 39 p. 40 ca2025: It’s Your Choice PUBLIC POLICY INSTITUTE OF CALIFORNIA Board of Directors Thomas C. Sutton, Chair Chairman and CEO Pacific Life Insurance Company Edward K. Hamilton Chairman Hamilton, Rabinovitz & Alschuler, Inc. Gary K. Hart Founder Institute for Education Reform California State University, Sacramento Walter B. Hewlett Director Center for Computer Assisted Research in the Humanities David W. Lyon President and CEO Public Policy Institute of California Cheryl White Mason Vice-President Litigation Legal Department Hospital Corporation of America Arjay Miller Dean Emeritus Graduate School of Business Stanford University Ki Suh Park Design and Managing Partner Gruen Associates Constance L. Rice Co-Director The Advancement Project Raymond L. Watson Vice Chairman of the Board Emeritus The Irvine Company Carol Whiteside President Great Valley Center Advisory Council Clifford W. Graves General Manager Department of Community Development City of Los Angeles Elizabeth G. Hill Legislative Analyst State of California Hilary W. Hoynes Associate Professor Department of Economics University of California, Davis Andrés E. Jiménez Director California Policy Research Center University of California Office of the President Norman R. King Executive Director San Bernardino Associated Governments Daniel A. Mazmanian C. Erwin and Ione Piper Dean and Professor School of Policy, Planning, and Development University of Southern California Dean Misczynski Director California Research Bureau Rudolf Nothenberg Chief Administrative Officer (Retired) City and County of San Francisco Manuel Pastor Professor, Latin American & Latino Studies University of California, Santa Cruz Peter Schrag Contributing Editor The Sacramento Bee James P. Smith Senior Economist RAND Corporation This project used 9,562.22 pounds of 100% post-consumer paper manufactured with wind power. Savings derived from using postconsumer recycled fiber in lieu of virgin fiber: 114.74 trees not cut down 331.34 lbs. waterborne waste not created 48,741.54 gallons water/wastewater flow saved 5,171.30 lbs. soild waste not generated 10,106.63 lbs. atmospheric emissions eliminated 66,051,323.54 BTUs energy not consumed Savings derived from choosing a paper manufactured entirely with wind energy: 1,428.45 lbs. air emissions not generated This amount of wind energy is equivalent to: 96.7 trees being planted 1,593.70 miles not traveled in an average automobile 5,311.82 cubic feet natural gas This publication is printed on FSC certified Mohawk Options, 100% PC White manufactured entirely with wind energy and contains 100% postconsumer recycled fiber. This paper is certified by Green Seal, and by SmartWood for FSC standards which promote environmentally appropriate, socially beneficial, and economically viable management of the world’s forests. Design: Chen Design Associates / Photography: Joseph Squillante, Photonica (pp. 2-3) / Printing: Cenveo Copyright © 2005 by Public Policy Institute of California. All rights reserved. San Francisco, CA Short sections of text, not to exceed three paragraphs, may be quoted without written permission provided that full attribution is given to the source and the above copyright notice is included. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office. Research publications reflect the views of the authors and do not necessarily reflect the views of the staff, officers, or Board of Directors of the Public Policy Institute of California. 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