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Solimar Research

In Brief: Central Valley Economy Continues To Suffer

Nov 9, 2009
The economy in California's Central Valley remains extremely poor, according to a statistical analysis prepared by the Great Valley Center. The region's per-capita income during 2007 was $29,790, or about 70% of the state average of $41,805. If the region were a state, it would rank 48th in per-capita income in the country, according to the center's economic indicators report, which is issued every five years.
 
"The current recession is just exaggerating the problems we already had," said Amy Moffat, the center's director of research and communications. Even when the overall economy is strong, the Central Valley is plagued by high unemployment and poverty. The biggest difference between this year's report and the 2004 version is that housing foreclosures have replaced rising housing costs as a major problem. The steady conversion of prime agricultural land to urban development is also a concern because of its implications for the valley's agriculture industry, said Moffat.
 
The report makes five recommendations for Central Valley leaders:
 
• Improve the quality of the workforce.
• Continue to support agriculture as a regional economic base.
• Diversify the economy  to meet the needs of a growing workforce.
• Capitalize on momentum from the federal recovery act.
• Understand the needs of rural communities.
 
The report is available on the Great Valley Center website.
 
 
Sacramento Community Development Director Bill Thomas and Dan Waters, a customer services supervisor under Thomas, have been placed on administrative leave after Waters approved 35 new home permits in an area subject to a federally imposed building moratorium because of flood risks due to substandard levees.
 
Waters, son of and campaign treasurer for Sacramento City Councilman Robbie Waters, allowed K. Hovnanian Homes to switch 35 building permits in the North Natomas area from one set of parcels to different parcels. The switch occurred earlier this year even though the Federal Emergency Management Agency prohibited new building in the area as of December 8, 2008.

Without authorization, Waters also allowed K. Hovnanian to defer payment of $61,000 in permit fees for three months. The Sacramento Bee reported that 11 of the houses are complete and four are occupied. The developer has denied any wrongdoing.
 
In late October, the City Council directed the city manager's office to investigate the Community Development Department.
 

As promised, the California Redevelopment Association (CRA) has sued the state in Sacramento County Superior Court to halt the shift of $2.05 billion from local redevelopment agencies to school districts and state agencies. The CRA contends that the transfer of property tax increment during the 2009-10 and 2010-11 fiscal years violates the state constitution. The group successfully used the same argument to block the shift of $350 million in tax increment to schools in the 2008-09 fiscal year (see CP&DR Redevelopment Watch, June 2009).
 
Redevelopment agencies in Union City and Fountain Valley joined the CRA suit. Mark Evanoff, manager of the Union City Redevelopment Agency, said the funds transfer, which would cost his agency $7.7 million, could halt a 100-acre BART station redevelopment project. The city has obligated all its tax increment to the station and others projects (see CP&DR Redevelopment Watch, March 2007).
 
According to state law, the $3.3 million transferred from Fountain Valley's agency to the Garden Grove School District could be spent only on the 64 students who live within the agency's redevelopment project area. That amounts to about $52,000 per student. "This is exactly what happens when lawmakers don't think things through," said Raymond Kromer, Fountain Valley community development director.
 
 
Nine federal agencies have signed a memorandum of understanding (MOU) intended to speed the review of electricity transmission lines on public lands. Among those signing were the Department of the Interior, the Environmental Protection Agency and the Federal Energy Regulatory Commission.
 
Under the agreement, a single federal agency will lead the review of a proposed transmission corridor. In addition, the agencies will assess proposed projects simultaneously rather than consecutively, and there will be clear timelines for agencies to complete their work.
 
The new transmission corridors would carry electricity generated at remote solar, wind and other renewable energy facilities. The proposed routes have frequently become controversial because they pass through sensitive wildlife and plant habitats on public lands.
 
It is unclear whether the MOU would eliminate legal challenges, but it could accelerate the federal permitting process by a year or more, according to federal officials. The MOU is available here.