August, 2012 | Issue 58
From Diane Harkeys Desk to Yours
Is All "S" Created Equal?
This op-ed originally appeared in the Flashreport
The Governor wants to build "s-" he exclaimed at a recent press conference announcing support for high speed rail, which was followed by a surprise proposal to dig tunnels for water transport from the Sacramento Delta, and the grand opening of the Sunrise Powerlink, that will one day allow for transmission of solar power from the Imperial Valley to San Diego and beyond. According to the Governor, these projects will create jobs and propel CA into the future - a new future that may not look like the California we see today or that of the past.
The question arises, will these projects and the state's current debt-laden financial trajectory, pave the new path for the return of the "Golden State" dynamism of yore? Roughly a decade ago we boasted the 6th largest economy in the world (now 8-9th) with more U-Haul trucks entering than leaving. For decades we led the nation with entrepreneurial spirit, low unemployment, high-paying middle class jobs in manufacturing and technology, state of the art infrastructure, high performing K-12 schools, affordable higher education, low debt, balanced budget, abundant natural resources and of course, great weather.
We still have great weather, and abundant natural resources, however restricted. But in taking the "new path forward" we should be examining if all "s" is created equal. Private investment in infrastructure, financed with company investment and/or private capital from bondholders, does provide employment and a multiplier effect to stimulate the economy. Unlike the recent spate of government investment, private investors analyze and justify projected cash flow repayment from a reliable, verifiable source. With the exception of the Powerlink, which appears to have been built with private investment, the rail and water infrastructure have yet to define a funding or repayment source.
Time will determine if the water tunnel idea is feasible and how it will be financed. As for High Speed Rail, we have had numerous audit and other reports that questioned the utility and the lack of financial data or support for the project and debt. One of the many problems with this type of supposed "stimulus" was stated in a recent opinion piece in the Wall Street Journal:
"Public investment might increase productivity in theory-the GI Bill and investment in the federal highway system, for example, helped make Americans more productive. But today's endless increases in government spending, with no discernible improvement in our infrastructure or educational outcomes makes it painfully obvious that politics and special interests have undercut its benefits."
So, while I seek continually to work with this Administration, I find it very difficult to reconcile supporting tax increases, cuts to education, taking billions from local governments, while promoting useless debt spending, with unknown impacts of Cap and Trade looming on the horizon. Our unemployment situation or statewide financial woes will not be improved by more debt or increasing regulations.
The first order of business should be getting our financial house in order and retaining and expanding employment with existing employers. Then, we might be able to encourage much needed investment in infrastructure for a brighter future. All "s" is not equal; we need private sector investment to stimulate employment and return the Gold to California.
High-Speed Rail: What's Next
Many of you have asked what really happened on July 5th when the majority party controlling the legislature and the Governor approved $8 billion for high speed rail, and what it means for the path forward. A recent article from "Innovation News Briefs" provides an excellent summation and analysis. You may view the article here.
We've had nearly a month away from Sacramento which allowed me the opportunity to reacquaint in my district of Orange and San Diego Counties as well as attended several functions in the communities I serve. I am continually reminded of the beauty and grandeur that is California, the vast geography, and the wealth of natural resources with which we are so blessed.
I was invited to speak in Bakersfield at a dinner meeting of the American Petroleum Institute along with Assemblymember Shannon Grove. The Central Valley, home to petroleum and agricultural industries and a very entreprenurial way of life, suffers from high unemployment due to arbitrairy water supply, shut offs, state regulation of oil production, and the housing crash.
We discussed state finances and how to cure our woes (there is a way out), as well as Cap and Trade, implementation of AB 32, or the 2006 Global Warming legislation, soon to be implemented by the California Air Resources Board. View a copy of the PowerPoint presentation here.
I was honored to speak on the topic of Cap and Trade, in conjunction with Robert Ming, Councilman of Laguna Niguel, at a well-known OC political forum. An attorney by trade, Robert brought a legal perspective to the analysis and debate, while I stressed the market mechanisms and WCI, Inc. (the Delaware Corporation designed to "help" California with linkage to Quebec and implementation of Green House Gas emission reductions, and environmental, market and other oversight).
Cap and Trade will impact every person and business in California and could create another Wall Street "Boom and Bust" as well as drive more businesses out of state, if implemented as planned, while not meeting pollution reduction goals. Recently, the Governor seems to be getting more involved in this legacy from our previous Governor, but more oversight and hearings are needed before we begin the "pollution" certificate auctions in November. To learn more about this complex topic, please visit my website here and you may review my presentation to the group here.
My staff attended the grand opening of the Sunrise Powerlink nested between hills near El Centro, which is about as far south as one can be and still be in California. Staff also helped me by touring the proposed desalinization plant near Doheny Beach to provide an update on progress with testing and agencies.
I attended the swearing in ceremony for the new Orange County Medical Association President, Standiford Helm II, MD. Dr. Helm has a way of explaining the serious issues we face in health care succinctly and with a bit of humor. I also delivered a certificate of recognition to the outgoing President, Joanna K. Tam, who delighted her audience with her own set of awards with an Olympic theme. In seeking to find a way through the labyrinth of regulations and state health care mandates, and still deliver quality health care in California, the OCMA deserves an Olympic Gold Medal!
While not having time to vacation, I did take time out to enjoy. I jumped at the opportunity to "ride the range" on horseback while in Bakersfied, courtesy of Shannon Grove, and her horse, Safeway, as well as ride my pal Socks on a fabulous trail ride through the hills of San Juan Capistrano as a guest of the Las Vaqueras Riding Club. View photos here.
We have one more month until the end of the 2012 legislative session. At this time the Senate and Assembly trade bills that have passed off the floor of each house and repeat the process, to obtain the necessary votes from the remaining house, prior to reaching the Governor's desk. Let us hope that some of the worst bills are not heard, amended or die in committee of the alternate house. Any bill that does not help to increase employment should be rejected or vetoed by the Governor. In Sacramento, that's a tall order! I'll keep you posted.