Carl Guardino is CEO of the Silicon Valley Leadership Group, an association of 375 CEOs throughout the Bay Area.

Viewpoints: There's no one answer to refurbish Golden State

Published: Sunday, May. 27, 2012 - 12:00 am | Page 5E
Last Modified: Sunday, May. 27, 2012 - 9:16 am

Most of us in the Golden State agree: California is in crisis.

A state budget deficit eclipsing $15 billion, the nation's third-highest unemployment rate at 10.9 percent, and 2.1 million residents eager but unable to find work.

Rational fear breeds irrational finger-pointing, with "99 percent" demanding the "rich" pay their fair share, and upper-income earners – the "3 percent" earning in excess of $250,000 – wondering why their annual contributions of 40 percent of California's personal income taxes are not considered enough.

Of greatest concern, however, is the disconnect that continues between well-meaning legislators in Sacramento and well-meaning job creators throughout the state.

It's hard to find solutions when there isn't agreement on the problem. It comes down to one disturbing fact: Most state legislators believe California's budget and fiscal problems are cyclical. Most CEOs in Silicon Valley and throughout the state believe our challenges are structural.

Those who believe California's problems are cyclical want to ride it out, sincerely seeing little or no need for change. Those who believe California's problems are structural call for bold action and measurable reforms. To the extent that public and private sector leaders talk at all, they talk past each other.

"Structural" vs. "cyclical" quickly gives way to a debate on "reforms" vs. "revenue." It's not either/or. We need both. Ironically, to gain either, both sides need to recognize that we need each other.

To earn the trust of a cynical electorate, to grow the jobs necessary for a strong economy, reforms are essential.

• Budget and governance reforms should include three essential elements championed by California Forward (on whose board I serve): Legislation must be in print for 72 hours before a vote; two-year budgets; and performance-based budgeting to keep agencies accountable, leverage limited tax dollars and ensure outcomes are measured and met.

• Regulatory reforms that balance our passion for environmental protection but stop the profound abuses of cherished environmental laws like CEQA; used like a club for non-environmental purposes, ironically blocking renewable energy, transit-oriented and infill developments.

• Pension reforms at the state and local levels like the moderate and measurable plan posited by Gov. Jerry Brown back in October. His 12-point plan protects the solvency of public sector pensions for workers depending on those resources, while also honoring California taxpayers who only dream of such retirement packages that their taxes provide for others.

• Education reforms that ensure that kids in every community have access to great teachers, excellent administrators, fully equipped classrooms on safe campuses. Michelle Rhee's "Students First" proposals deserve dialogue and debate.

With reform, more revenue is also essential.

• It's in our self-interest to maintain, and rebuild, California's world-class university systems: community colleges, CSUs, UCs and some of the finest private universities on the planet. Students at San Jose State, which I attended two decades ago, should not be paying more than those attending Ivy League universities on the East Coast, and classes need to be restored to ensure that students can get their four-year degrees.

• It's vital that we rebuild crumbling roads, rail systems, dams and other infrastructure investments on which we all rely. It's wise to invest in broadband deployment, transit and affordable homes. Essential services cost money, and all Californians should be called on to contribute an appropriate share.

I heard a frustrated citizen recently remark about Sacramento, "The attitude seems to be 'just shut up and send us more money.' " Earned or not, the Legislature has an approval rating hovering at about 15 percent. Requests for revenue, without real reforms that honestly rebuild trust, will remain a tough sell. And sadly, revenue without reform still won't fix the structural issues gnawing away at the Golden State.

California's challenges: Structural or cyclical? Revenue or reform? If the answer is both, then let's come together to stop fighting over the crumbs, and get back to growing the economic pie. It's a call to action, California. Let's stop attacking each other and start attacking the issues other regions, states and nations are using to compete against us.

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Read more articles by Carl Guardino



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