California County News

Riverside County Hosts Chinese Delegates in Bid to Spur Economic Growth

Over the holiday break, a group of delegates from China were welcomed by Riverside County’s Office of Foreign Trade. In fact, the county welcomed 10 different groups of delegates during 2011 in a push to spur economic development and mutually beneficial relations. In particular, the county has tried to create interest in agriculture exports to China.

The latest batch of delegates visited to discuss exporting navel oranges to the Jiangsu Province, according to Tom Freeman, spokeswoman for Riverside County’s Economic Development Agency. Foreign firms from the country have also expressed interest in Riverside’s Hunter Business Park. The Press Enterprise reports:

“Freeman also said the county has been working with Riverside’s mayor and UC Riverside for months to land a battery factory. Winston Chung, a Chinese businessman and inventor of lithium ion batteries who invested heavily in Inland RV maker MVP RV and UC Riverside, has said he wants to build a battery factory but hasn’t said where.”

And of course, no foreign visit is complete without the exchanging of gifts. We’ll leave it to you to decide who fared better in that department, as the county received four jade bracelets and the Chinese delegates were given a cherry wood desk clock with the phrase, “Friendship is timeless.”

Federal Report Covers Increase in Vacant Properties and the Costs to Local Government

The number of vacant properties in the United States has increased dramatically in the past 10 years, which has left local governments with considerable costs. In fact, many states have experienced a 70 percent increase in the number of vacant properties to deal with; additionally, there were over 10 million such properties by April of 2010. American City & County points out that “In 2010, government-sponsored enterprises reimbursed servicers or vendors more than $953 million for property maintenance costs, but local governments are bearing a considerable amount of the expense, as well.”

The Government Accountability Office (GAO) has released a new report on the impact of vacancies and while federal dollars have helped local officials cover some of the costs, many have still spent millions of dollars maintaining or demolishing properties. The report states the following about feedback from locals in determining accurate figures:

“Local government officials and community group representatives told us that distinguishing among different types of vacant properties is important to be able to identify the number of properties that are likely to impose costs on the community. As we noted above, the Census vacancy status categories can be useful in identifying some vacant properties, such as those in the “other vacant” category, that may be more likely to be unattended and so might burden local governments as opposed to those that are likely to be maintained, such as those that are for seasonal use.”

You can read the full GAO report here and the graph below provides a picture of how vacancies have risen in the past 10 years:

Good Signs: State’s Unemployment Rate Drops Again; New Labor Force Data for Counties

Inch-by-inch, economic reports on the state of California are improving—ever so slightly. The Employment Development Department has released its latest figures, which show 6,600 new jobs were added during the month of November. Consequently, the unemployment rate now stands at 11.3%, thereby making November the fourth straight month in which the jobless rate has declines. In October it was at 11.7%. The latest rate is the best the state has experienced since the worst of the recession dealt California (and the nation) a blow back in 2009 and now the country’s overall unemployment rate stands at 8.6 percent.

Since 2011, the state has added a total of 211,400 jobs. The LA Times reports on the following additional details about the report:

“Similar drops were registered in major regions: Los Angeles County is down to 11.9% from 13% a year ago; Riverside-San Bernardino counties to 12.5% from 14.5% a year ago; Orange County to 8.1% from 9.4% a year ago; and Ventura County to 9.5% from 10.9% a year ago. While economists caution that some of the improvement in the November numbers could be caused by people giving up on job searches, they point to the last two weeks' decline in the number of people putting in first-time claims for unemployment insurance benefits as a positive sign that a sustained recovery is underway.”

You can find unemployment rates and job figures for each of the state’s 58 counties on page 4 of this report.

White House Business Council Roundtable Event in Riverside Finds Support of Supervisors

The federal government has been holding a series of White House Business Council Roundtable events across the country to give government leaders the opportunity to hear directly from businesses, as well as promote collaboration between the public and private sector to spur innovation and job creation. Over 500 such events have been held so far in all 50 states. A similar event has been proposed for Riverside County on January 30th and the Board of Supervisors recently voted to have the county participate in the meeting sponsored by the Obama Administration. The focus will partly lie on partnering with the U.S. Minority Business Development Agency to promote job growth not only across the region but also on the part of minority-owned businesses.

While the inland area of California suffers greatly from high unemployment, Supervisor Jeff Stone voted against supporting the event and questioned taxpayer money going toward an event that was focused primarily on minorities instead of anyone. Stone stated, “I just question the political timing of this […] Unemployment in Riverside County has been at 15 percent now for a couple of years — why is this coming at the end of a White House term? Why didn’t it happen earlier on when this insult was placed upon our citizens?”

Chairman Bob Buster posited the event would be important for the county to exert its influence in shaping jobs and economic issues. Supervisor Marion Ashley noted that the event was ideal for making the federal government aware of the county’s grievances; Ashley commented, “You know, you’re stifling us with these environmental regulations — that’s the very thing they need to hear, they’re gonna hear it too. I think it’s a good thing to help our jobs. And we have to show our courtesy to the president.”

Facebook Touts Economic Benefits to San Mateo County with Relocation to Menlo Park

The economic boon presented by the expansion of Facebook in Menlo Park is likely causing San Mateo County officials to see dollar signs. The social media company is moving its employees from Palo Alto to a new building that was once occupied by Sun Microsystems in Menlo Park. It is projected that eventually 6,600 people will be employed at the campus and an expansion of the facility is expected to be completed by 2014. So what’s in store for San Mateo County’s economic future?

A new study shows that Facebook’s relocation could result in $366 million in new temporary construction spending in the county as well as 2,441 temporary construction jobs. The company is spending $250 million on construction and it is believed Facebook’s arrival could create $116 million in additional economic activity. The research firm also noted that “The shift may also result in $29 million in total annual retail spending at nearby lodging and retail businesses.”

Housing will have to be built to provide space for the influx of employees and the company has argued that other companies and businesses will follow Facebook to the region. In light of the jobs, housing, retail, and business developments, the county can expect to rake in plenty of new sales and property tax revenue. According to Facebook, here are the benefits the company is touting it will bring to San Mateo:

• 5,400 jobs and $839 million in new economic spending to San Mateo County; this includes $302 million in wages and salaries
• 550 jobs and $83 million in new economic spending to Menlo Park; this includes about $34 million in wages and salaries
• Generating demand for 14,000 room nights of lodging in the county hotel industry with a total value of about $3 million per year
• Facebook employees spending about $27 million at county retail stores and restaurants per year
• $168.9 million in one-time construction labor income
• A total of $366 million spent on construction, of which $250 million will be for campus related construction

That being said, there are still concerns about the impact on traffic that will be created by Facebook’s presence.

State Revenues Beat Projections in November; Guv Threatens More Cuts if His Initiative Fails

The latest cash update from State Controller John Chiang did have some good news: the state’s revenues during the month of November were $497.7 million above projections outlined in the state budget. That being said, Chiang was quick to point out that total year-to-date general fund revenues are still behind the budget's estimates by $1 billion.

The Controller commented the following: “While November's totals came in 9 percent above projections, they did not erase the fact that we are still running $1 billion behind in revenues and $2 billion ahead in expenditures. Regardless of whether midyear cuts are enacted next week, the Legislature faces a tremendous fiscal challenge when it returns to session next month."

The combined current year cash deficit stands at $21.5 billion and the State ended last fiscal year with a cash deficit of $8.2 billion. For the month of November, it was primarily income tax revenues that helped boost revenues above projections, as the state took in $531.4 million, or 19.6 percent, more than expected.

Read the Controller’s November financial statement here. Summary analysis can be found here.

You’ll recall that budget figures are particularly important this December because the Department of Finance will release its report to determine how much the state has to cut. The Bee reports on the following important point about November’s figures:

“The Legislative Analyst Office's Jason Sisney said the strong November income tax figures were largely due to fewer refunds paid out rather than improvements in the economy. If so, the November total doesn't necessarily foretell greater revenue for California through the rest of the fiscal year, which means the state may still be on track for a significant round of midyear cuts.”

In other budget news, while midyear cuts appear likely, the state could face another round of automatic cuts if the governor doesn’t get his way, according to the administration. Brown recently launched an initiative that would raise taxes and the governor has said if voters reject it, then the state should prepare for even more cuts to address the shortfall. The governor commented, “We’re going to balance the budget. We’ll propose cuts and the taxes, and if the taxes don’t materialize, I will propose we have trigger cuts that go into effect immediately.”

Republicans have criticized the governor’s threat and suggested he is holding taxpayers hostage.

Fresno County Saddled with Highest Poverty Rate in CA

With nearly 250,000 county residents living in poverty, Fresno County has the highest poverty rate in the state of California, according to new census data. The poverty rate in Fresno is 26.8 percent, which is far higher than the statewide average of 15.8 percent. Particularly alarming is the poverty rate’s impact on children, as nearly 40 percent of youth in the county are living in poverty, which is double the state average. For the sake of comparison, back in 2009 the county ranked seventh in the state for poverty and furthermore 70,000 more people lived in poverty last year than in 2007. The Fresno Bee reports:

“Several counties in the San Joaquin Valley were among the state's poorest, according to the data. Experts attribute this to the region's weak economy and unskilled labor market -- made worse by the nation's economic slide. Fresno County, though, has been particularly vulnerable to the bad times, said Alan Berube, a senior fellow at the Washington, D.C.-based Brookings Institution. The county's many pockets of concentrated poor have made it a harder place to turn around, he said.”

Many school districts in both Tulare and Fresno County had more than half the students living below the poverty line in 2010. Tulare had the second highest poverty rate at 24.6%. Notably, Fresno has an unemployment rate above 15%.

You can find state and county figures from the U.S. Census Bureau here.

Getting Our Fair Share? CBP Tracks Federal Spending in CA in New Report

Curious about just how many federal dollars are spent in California? Well, the California Budget Project — a nonpartisan/nonprofit organization seeking fiscal reforms to benefit low and moderate income Californians — has done the research for you in a new report that tracks federal spending, which accounts for more than one-third of the state’s budget. Around 15 cents out of every federal dollar spent through the state budget goes to California’s public schools and universities and over 50 cents out of every federal dollar spent through the state budget supports health and human services for children, seniors, and many other Californians. The CBP points out that Californians received $333.8 billion in federal dollars both through and outside of the state budget in FFY 2010. Notably, social security accounts for nearly one-fifth of federal spending here in California. Here are some other figures and highlights from the CBP’s report:

• "An estimated three-quarters – roughly $240 billion – of the more than $330 billion in federal dollars spent in California in FFY 2010 went directly to individuals, businesses, and others without passing through the state budget
• More than one-fifth (23.6 percent) of federal dollars spent in California in FFY 2010 were provided as grants through federal agencies, including the Department of Education, the Department of Transportation, and the Department of Health and Human Services
• More than one out of six federal dollars (17.2 percent) went to businesses that provide goods and services to the federal government, including defense contractors.
• The federal government provided nearly $50 billion for health and human services programs in 2010-11; Nearly three-quarters (73.5 percent) of these funds – an estimated $36.4 billion – supported the Medi-Cal Program
• $272.9 million for drug abuse prevention, treatment, and recovery programs for approximately 300,000 Californians through the Department of Alcohol and Drug Programs
• The federal government provided $5.0 billion for transportation programs in 2010-11 – more than 5 cents out of every federal dollar spent through the state budget"

Key questions about federal spending in the Golden State concerns whether we get our fair share. Not according to the figures: California had 11.9 percent of the US population in FFY 2010, but accounted for 10.2 percent of federal expenditures; in addition, California’s share of federal dollars amounted to $8,960 per capita, well below the national per capita level of $10,460.

You can read the CBP’s full report here.

Pulling the Trigger: Mid-Year Cuts Likely as LAO Reports St Will Face a Deficit of $13 Billion

The state Finance Department and Controller John Chiang have already had their say about the state’s revenue forecast and troubling fiscal outlook and now the Legislative Analyst's Office has released its take on the numbers, which are garnering so much attention because the status of the state’s shortfall will affect the likelihood of dreaded trigger cuts. As a refresher, Chiang reported the state has a gap of $1.5 billion in revenues and soon after the Finance Department said the state was $1.3 billion behind projections. Under the budget, it was estimated that the state would take in $88.5 billion in revenues, but the LAO has concluded revenues will only amount to $84.8 billion, which means the numbers will be $3.7 billion short of the $4 billion officials were hoping to receive in order to close the budget and avoid mid-year cuts. The revenue shortfall is supposed to translate into $2 billion in trigger cuts to various state programs, but while the governor’s administration is now acknowledging that some cuts will be necessary, they are not committing to a precise number and will gather further details come December. On December 15th the Department of Finance will release its final revenue projections, and its report will play a major factor in deciding cuts.

Overall the LAO has posited that the state's deficit will be nearly $13 billion through June 2013. The report concisely states: “The remaining work of eliminating the state's persistent, annual deficit will require more difficult cuts in expenditures and/or increases in revenues.”

In response to the LAO’s projections, Controller Chiang released the following statement:

“Today’s news is no surprise.  Our economy’s sluggish growth means a tax windfall is unlikely, and not a penny of the estimated $4 billion has been collected to date. The Governor and lawmakers were smart to backstop their hopeful budget projections with mid-year cuts, but they may not have gone far enough.  Today’s report tracks with the troublesome pattern we have seen in the State’s receipts and spending, which could mean a cash-flow problem in California’s near future.”

The LAO’s outlook has also reenergized debate about how the state should tackle its deficit, with Democratic leaders calling for tax hikes and Republicans unsurprisingly disagreeing with that assessment and criticizing the shaky budget that Democrats passed on their own. You can read the LAO’s full report here.

Finally, the LAO released the following video to explain the conclusions it reached:

Download Video as MP4

 

State’s Unemployment Rate Falls to 11.7%; County Figures Available from EDD

The state’s unemployment rate fell ever so slightly during the month of October, according to new data from the Employment Development Department. Overall 25,700 new jobs were added last month. So then where does California’s unemployment rate currently stand? It’s now 11.7%, which is certainly lower than the 12.5% rate that the state had a year ago; that being said, 11.7% is still far from encouraging. The nation’s unemployment rate was 9%. Manufacturing, trade and transportation, government and mining and logging all saw decreases in jobs. Bright spots for employment included construction, information, financial activities, professional and business services, educational and health services and leisure and hospitality.

You can find unemployment figures for each county in California here. Marin County is ranked best in the state and Imperial County is ranked worst.

You can also find more details on labor force and industry employment data for each county and metro area here. In many counties job additions came from government positions.