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Growth, Public Investment Decisions Confront Governor's New Council

Is Gov. Schwarzenegger's "Strategic Growth Council" simply the latest in a decades-long string of gubernatorial efforts to make it look like he is dealing with growth? Or can Schwarzenegger actually take coherent action on growth by appointing a Cabinet-level council devoted to the issue?

It's probably a little bit of both. Despite all the focus in Sacramento these days on greenhouse gas emissions reduction, the Strategic Growth Council doesn't seem likely to focus on the "smart growth" policy initiatives that many leaders seem to think are necessary to meet the goals of AB 32. Meanwhile, the real focus of Schwarzenegger's "strategic growth" effort appears to be infrastructure and, in particular, getting bond money out the door as quickly as possible to build new infrastructure.

Schwarzenegger first glommed onto the "strategic growth" theme during 2006, when he used the phrase to describe his 10-year, $222-billion infrastructure effort including the $40 billion in bonds that were placed in the ballot that fall (see CP&DR Insight, February 2006). The "strategic growth" phrase was borrowed from Schwarzenegger's political mentor, Pete Wilson, who used the same words to describe his stillborn growth management initiative back in the early '90s.

Now that all the bonds have passed, Schwarzenegger has taken the next step and appointed a five-member, Cabinet-level council charged with implementing the vision contained in the infrastructure effort. Chaired by Cynthia Bryant, the director of the Office of Planning and Research, the council also has as members Resources Secretary Mike Chrisman; Business, Transportation, and Housing Secretary Dale Bonner; Environmental Protection Secretary Linda Adams, and Food & Agriculture Secretary A.G. Kawamura.

In and of itself, the idea of a Strategic Growth Council isn't a bad one. Whether the council helps to bring about much-needed change in the state's growth strategy depends on what Schwarzenegger decides to do with it. The growth council has been charged by the governor with four tasks:

Award and manage grants and loans from Proposition 84 funds the open space bond placed on the 2006 ballot by initiative, not by the governor "to support the development of sustainable communities."

Coordinate the four member state agencies, as they undertake infrastructure and development projects, to "encourage sustainable land use; protect natural resources; improve air and water quality; increase the availability of affordable housing; improve transportation; and meet the goals of the Global Warming Solutions Act (AB 32)."

Recommend policies to the governor, the Legislature and state agencies that encourage sustainable development.

Collect and provide data to local governments to help them develop and plan sustainable communities.

Although this charge is long on the rhetoric of "sustainable communities," it's not clear that this is where the council's actual work will be focused. For one thing, there's no reason to reinvent the wheel on the growth question; California has no lack of laws and policies calling on the state to do the right thing in this regard.

For more than 30 years, a state law usually honored in the breach has required the governor to issue an "Environmental Goals and Policies Report" every four years (see CP&DR In Brief, December 2003). In 2002, shortly before he was recalled, Gov. Gray Davis signed AB 857, a law which requires all state actions to promote what might be called a "smart growth" pattern emphasizing infill development, compact greenfield development, and protection of agricultural and open space land. The state hasn't done much with this law since Schwarzenegger was elected in 2003, and there is no mention of AB 857 in any of Schwarzenegger's strategic growth literature. It's almost as if the law were never passed.

The second big question is how aggressively the Strategic Growth Council will focus on implementing AB 32, the state's greenhouse gas reduction law. Environmental Secretary Adams a veteran of the Davis Administration was Schwarzenegger's chief negotiator on AB 32, and her agency oversees the California Air Resources Board, which is the primary implementer of AB 32.

But implementing the land use portion of AB 32 has fallen mostly to Bonner's Business, Transportation, and Housing (BTH) Agency, and the administration's rhetoric on the BTH side has focused mostly on providing local governments with carrots rather than wielding sticks in reducing greenhouse gas emissions. In addition, it appears that soon the Legislature will hand Schwarzenegger SB 375 a bill that is supposed to provide a roadmap for implementing AB 32 on the land use side, but looks an awful lot like a statewide growth management law. It's hard to know how aggressively even a moderate Republican administration will go after implementation.

Most important, however, is the fact that the focus of the Strategic Growth Council isn't really on the land use and greenhouse gas aspects of California's growth. Its major focus is on infrastructure and, specifically, on building infrastructure more quickly.

Virtually all of the administration's public information on the Strategic Growth Council is not about land use and growth patterns but, rather, about using public-private partnerships to speed up the delivery of infrastructure projects. The administration calls this approach "performance-based infrastructure." It includes not only the "design build" approach, which allows construction firms rather than state engineers to design infrastructure projects, but also efforts to permit private companies to finance, own, and lease public infrastructure projects.

The strategic growth portion of the governor's 2008-09 budget focuses on public-private partnerships, going into extended detail about privately financed and owned infrastructure projects throughout the world. The administration has highlighted such efforts as the private toll lanes on State Highway 91 between Orange and Riverside counties as a successful example of such public-private partnerships. However, after a middling performance under private ownership, the toll lanes were taken over by the Orange County Transportation Authority a few years ago (see CP&DR Public Development, February 2003, February 2000).

The strategic growth portion of the governor's budget also highlights the next round of proposed infrastructure bonds in Schwarzenegger's agenda, including the eternal effort to build a more efficient but potentially more environmentally destructive system of moving water from north to south through the Sacramento-San Joaquin Delta, and the need to build more surface reservoirs in California.

Some of these efforts are likely to line up nicely with greenhouse-gas-driven growth management efforts. Almost everyone agrees, for example, that more reservoirs will be required as global warming continues to influence precipitation patterns. If the Strategic Growth Council is a serious effort by the administration to get the state's act together on growth and greenhouse gases, it could be very effective. If, on the other hand, it turns out to be just an effort to promote private infrastructure financing, it'll be yet another opportunity missed.