Darrell Steinberg, State Senate President Pro-Tempore, Still Bullish on California's Future

It is always precarious, when talking about California in the midst of our economic challenges to either be a downer and talk about all of the problems that we face or to be a little bit Pollyanna-ish as a leader and a politician, speaking too positively about how easy it would and will be to actually make things better. I tend a little toward the latter, and I begin by saying what we all know-our challenges in California are very real. We are a nation-state, as we often say, and the impact of the national and international economic crisis has been profound and most marked on the economy of California.

Some might say that I drew the short straw when it came time for running for leader of the state Senate, and I just happened to pick a time when California experienced a series of the largest deficits in history. You couple our economic challenges with the fact that we have a structure of government in California-and it's great to be joined by Wendy Greuel by the way; I mentioned Wendy, not only because of her important role here and in Los Angeles and in the state, but as a city official and as a state official, our fates and the fate of California are really tied. We have a structure here in California of governance that I'm not sure works for us any longer. Thirty-two years after the passage of Proposition 13, the power to raise revenue has evolved to the state, while 70 percent or more of the services are provided by local governments and school districts. In large part, people don't know whom to hold accountable for what. Local communities have a very difficult time defining their own priorities and their own vision because they don't have any authority over the revenue side of the equation.

When we combine the economy, the large deficit, and the very obvious structural challenges we face in governing California, I look forward, with a new governor, and a new legislative session, and say: Now is our opportunity to change what we know is broken and to build a new economy here in California. If not now, when?...

...I see great opportunities. I see a new governor, Jerry Brown, who comes on at the young age of 72, without any particular ambition beyond wanting to fix governance here in the state, without any greater ambition than trying to take the lesson of the defeat of Proposition 23, and building a new clean, high-wage economy in this state. I see someone who will be willing to take the right kinds of risks. He won't be satisfied with just triaging our way through the crisis until, hope upon hope, the economy returns to where it was-if it ever returns-prior to the terrible recession of 2007 and 2008.

As I meet with the governor and I begin defining an agenda with my colleagues in the California State Senate, I say we must be focused. We have to be focused on three things. One, we have to resolve the budget-fairly, intelligently, and compassionately. Two, we need to be serious about reforming the structure of state government and bringing more services closer to the people. Right now, the state provides 70 percent of the funding for education, and the local districts pay for 30 percent. I think we need to reverse that by giving local districts the ability to find their own priorities and have the state be an equalizer, as it must and should. Third, we need to be serious about incentivizing, capitalizing, encouraging, and removing the regulatory barriers, whatever is necessary, to catalyze a new clean economy in this state. Prop. 23 failed. And I'm glad it failed. It was a very strong message to all of the skeptics out there who like to divide and say we have to have an either/or: you're either for a clean environment or you're for high wage jobs. The voters in California said they expect both. So now the real work begins.

How do we translate what I would call the "happy talk" of green jobs into a real short-term, medium-term, and long-term strategy to create a high-wage tax base in California? Because at the end of the day, that's the only way we're going to sustain public education, higher education, and other vital services. The task is daunting, but when people ask me: "Why do you think we can overcome old ways, old prejudices, old stale coalitions and create new coalitions and change in California?" I cite SB 375. Because SB 375 has some history. I won't bore you with all the details, but suffice to say that for decades in the state, whenever people talked about regional government, the state having any role in land use planning or integrating land use planning, transportation, and the environment, these notions were met with fierce resistance. I know, because in 2002, I introduced a little bill (and I didn't know any better) called AB 680, which called for cities and counties to sharing the growth and sales tax per capita, instead of back to the population, as a way to disincentivize the sometimes insidious competition on what side of the border the next great commercial developer is going to align. I found my picture in almost every post office in California cities after that. I had tread on the third rail and, in the end, we were able to go far but we were defeated.

Then, in 2006, something revolutionary happened, and we all know what it is. The Legislature passed, and Governor Schwarzenegger signed, AB 32. All of a sudden, we were required, and set the appropriate goals, to significantly reduce greenhouse gas emissions. In the first couple years, of course, all the focus, rightfully, was on alternative energy, alternative vehicles, and stationary source reduction. And everyone was afraid to touch that third rail, again, about land use.

Yet we recognized that if we did not deal with land use, if we didn't deal with road patterns, and if we didn't figure out a way to incentivize economic development and infrastructure investment in the urban core, we would have a very difficult time satisfying our AB 32 requirements by the year 2020 and beyond. So we introduced a bill that said that communities and regions ought to be rewarded for development patterns that reduced vehicle miles traveled-the amount of time that people spend in their automobiles to go from home to work, from home to shopping, or from home to the park. It was a battle.

Here's what was interesting: not only did we pass a landmark piece of legislation, which for the first time in this country will reward regions with major transportation funding if they plan to build communities in ways that are sustainable, we also changed the political dynamic and coalition in California around these issues. For decades, the builders were at odds with the environmentalist community. The cities and counties certainly have been at odds, at many points, with the environmental community and with the state of California when it comes to who controls land use and who doesn't. The affordable housing community had often been at odds with the environmental community and, sometimes, the building industry.

What happened in the end was a classic case of real compromise to move our state forward. The builders and cities agreed to having the state play some role in land use planning by setting these emissions targets. In exchange, the builders got significant environmental relief-CEQA relief-for projects consistent with the Sustainable Community Planning in the urban core. The cities got a longer planning horizon, so they weren't subject to regulatory burdens and lawsuits every time they made a new plan. The affordable housing advocates got more certainty in terms of where affordable housing can and should be built into the Sustainable Communities Plan. The environmental community got what it had sought for a long time, which is an overarching state and regional commitment to land use patterns that will improve our environment: the anti-sprawl initiative. But in exchange, they had to give up some of the regulatory relief and the CEQA relief within the sustainable community zone.

In fact, at the end of this process, all of these warring combatants, who have warred for years, came together and helped ensure the passage of this bill and helped ensure that the governor signed the bill (that was a question mark even after it passed, but he signed the bill because the coalition was fairly overwhelming). It was the right follow up to AB 32.

This gives me the hope and the real belief-not Pollyanna-ish, not pie-in-the-sky-that we can take practical issues here in the state and we can make change for the better. Look at the opportunity SB 375 presents us now. It presents us with the opportunity to define an economic development agenda in a way that is consistent with a clean environment. It sends a clear message that we have to find dedicated revenue sources or some other way to invest in transit in the state. We have to find a way to gear our future bond issuances, whether they are in transportation, water, or any other infrastructure area, to incentivize and say, "More of that money needs to be directed to make sure that we are building sustainable communities consistent with SB 375."

It's a chance to revitalize the urban core and create a real job magnet. It even creates a possibility, maybe this is a little Polyanna-ish, where we can link the growth of this new economy with public education reform-create career pathways for young people as early as high school, educate and train young people for these new clean jobs, and reduce the drop-out rate for the state. If you're wondering if there is a chance that things can get better: The road is full of potholes, the path is paved with pitfalls, but the opportunities are great. As long as we persevere and we don't give up, California will turn around, and I'm proud to be a part of that.