California’s cities and counties have faced unprecedented challenges over the past two years, caused by forces largely outside of the control of local leaders.

First, the foreclosure crisis swept through many neighborhoods displacing families and decreasing property values. Next came the global recession that has lead to record high unemployment and increased demands on government services. Finally, Sacramento once again looked to “solve” its budget challenges by forcing local governments to share the burden of its fiscal mismanagement.

These three factors have forced local leaders to cancel infrastructure projects, renegotiate contracts and pension plans, and layoff workers.

The pain caused by foreclosures and the recession is widespread – people across the globe have been affected. But Sacramento’s inability to balance its books without “borrowing” from California’s cities and counties (they call it “shared sacrifice” in the Capitol) is not just indicative of the state’s current problems, but rather a symptom of its long-term decline.

This outrageous power grab is yet another in a series of similar raids in Sacramento that lead local governments to develop and support Proposition 1A in 2004.

Local leaders have more important things to do then worry about Sacramento’s machinations; they have communities to revitalize, jobs to create and business opportunities to develop.

Local governments have an expertise in planning and strategic development that is lacking in Sacramento. Local governments develop General Plans, Regional Transportation Plans, and other strategic plans that help them identify and prioritize opportunities, allocate resources to advance those priorities, and determine if their plans are being successfully implemented. This way of thinking is almost entirely absent in Sacramento, which is stunning given how many former local elected officials sit in the legislature.

The status quo in Sacramento is a zero-sum game between competing interests focused on a shrinking pool of state revenues. California’s local governments have been a consistent loser in this process, often getting their pocket’s picked while simultaneously having social programs and mandates shifted from the state to cities and counties. Can’t we all agree that it’s time for a change?

Let’s begin by recognizing that the state and local governments have a shared interest in stabilizing their revenues so that they can provide consistent and reliable services to their constituents. Sacramento often looks to taxes to accomplish this, but how about focusing on what local government does best: economic development.

It was encouraging to see that a group of state and local business leaders have adopted the same way of thinking. They have launched an effort called the Agenda for Economic Recovery which seeks to make jobs and economic expansion the top priority for lawmakers. The effort focuses on four common sense steps that would go a long way towards helping Sacramento get its house in order.

The proposals are to:

1)    Develop a comprehensive, statewide economic strategy.
2)    Implement that strategy through policies that aggressively promote job creation and retention here in California.
3)    Analyze the economic impacts of legislation and regulations.
4)    Determine the effectiveness of programs by developing clear metrics.

As local leaders know, having a strategy in place for economic development is essential; it provides businesses certainty regarding the priorities of government and it enables the government to facilitate economic growth rather than hamper it.

Analyzing the economic impacts of bill and regulations when help lawmakers understand the consequences of proposals and ensure that policies are implemented in the most efficient and cost-effective manner as possible.

The Agenda for Economic Recovery offers a path to move California forward. Legislators and regulators, local leaders, labor, environmentalists, businesses small and large must embrace this way of thinking if California is ever going to end its ongoing fiscal crisis and improve its economic environment.

Local government’s ready to play its part, how about you Sacramento?

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