Business Drums for Basics

For far too many years, political wisdom in the governor’s office has held that California’s economy will thrive only as long as the state cuts business taxes and chops away at regulatory underbrush. The concept of Sacramento investing tax revenues to make California a better place, taking an active hand in planning to accommodate growth and protect the state’s resources, has been derided as anti-business.

Now, however, it has become apparent that the laissez faire approach is shortsighted. Increasingly, it is business that is taking the active lead in promoting new infrastructure programs, sound land-use principles, fiscal reform and an enhanced quality of life. In fact, business leaders now are saying that the economy will fail to reach its potential unless these needs are met.

During the summer, the California Business Roundtable called for the investment of $90 billion in the state’s infrastructure over the next decade. The Roundtable, composed of the state’s biggest corporations, promised to put its considerable political muscle behind such a campaign.

Now, a new study with platinum business credentials calls for an even more comprehensive program of infrastructure finance, fiscal reform, regional planning and revitalization of urban areas. The report was written by Stephen Levy, director of the Center for Continuing Study of the California Economy for Californians and the Land, a nonprofit group supported by the Hewlett, Packard and Irvine family foundations and Bank of America.

The 35-page report says California must preserve its quality of life and environment in order to make the state even more attractive to business and workers. Quality of life is not just an amenity, the report properly notes. It is essential to a healthy economy.

The report calls for action in five broad categories: a regional approach to planning for jobs, housing and open space; higher-density urban land use to accommodate population and job growth; public investment of more than $100 billion over the next decade in schools, transportation, airports and water facilities; fiscal reform to help pay for infrastructure projects and quality public services, and land-use planning that includes job and housing opportunities for all Californians.

Other groups--some formal and others on an ad hoc basis--have studied similar problems. A growth management consensus project made considerable progress in the early 1990s but foundered on the shoals of economic recession and the lack of support from Gov. Pete Wilson. The Constitutional Revision Commission developed many of these issues, but its proposals were ignored in the Capitol. The ambitious Consensus Governance Project continues to work toward agreement on overriding state issues.

The most critical impetus for action will be strong support from the next governor, whether it is Democrat Gray Davis or Republican Dan Lungren. All major political forces must be involved in negotiations. The participants need to put the compelling future needs of California ahead of their own political ideologies, parochial interests and term-limit myopia. Business leaders must remain at the forefront of this campaign to overcome the myth that any effort to manage growth is anti-business.

State leaders often boast that California has the world’s seventh-largest economy. But if the state means to remain a leader of the pack into the 21st century, it must begin to deal with its fundamental problems now.