Official: State industry is fragmented

Pasadena Star News

By: Cynthia Kurtz

Posted 2/27/2013

Recently the San Gabriel Valley Economic Partnership was pleased to host Karen Hathaway, 2012 President of the Los Angeles Area Chamber of Commerce, as our featured lunch speaker. The Chamber Chair is a fitting role for Karen since her great-great grandfather was one of the founders of the L.A. Chamber 125 years ago.

Karen is President and Managing Partner of LAACO one of the oldest continually operating businesses in Los Angeles. Her family’s involvement in the Southern California business community harkens back to the 1880’s, with the founding of the Los Angeles Athletic Club. Today the company is a publicly traded limited partnership. Along with the LAAC, their primary business is managing four million sq. ft. of self-storage facilities.

Even with the responsibilities that come with being appointed President of the company in 1990 and elected as Managing Partner in 1991 Karen has made civic and community involvement a priority. Throughout her business career, Karen has found the time not only to chair the Los Angeles Area Chamber of Commerce, but to serve as chair of the Central City Association, as well as to have served on the Boards of numerous community service organizations including the American Red Cross of Greater Los Angeles and the United Way of Los Angeles.

When it comes to civic engagement, Karen doesn’t just talk the talk, she walks the walk. And civic engagement was what Karen’s lunch presentation was about. Her theme was simple - people in business need to get involved in public policy decision-making. 

California has the ninth largest economy in the world. Los Angeles County has the 21st largest GDP. Our region leads the nation in number of export/import related jobs and is still the nation’s largest manufacturing center. We are clearly a global business center. 

So how can a state and a region with this much economic activity have such a bad reputation as a place to do business? Why are costs and regulations businesses must shoulder so much higher and more complex here? Instead of pointing fingers at who to blame for our situation, Karen suggested the business community needs to do some soul searching. What we would find is that businesses and business associations have “fallen behind.”

“Labor unions coalesced long ago,” she told us “as did the environmental community. Not business.  Fragmentation is the major issue that dilutes the voice of business in politics and government reform. We are told by elected officials that business needs to start showing up (when policy is being made). Our physical absence is a sign that we don’t care.”

Karen suggested a road map for action. Involvement in associations like the L.A. Area Chamber and the San Gabriel Valley Economic Partnership is a step...but just the beginning. “There are limits to what any one business organization can do by itself. Business groups must band together, if we want to be heard.  When we work together, we increase our leverage.”

Great advice from someone who knows the business of business and the business of public involvement.  Partnership and collaboration are the means for a stronger California economy.

HOT Lane may be one answer to congestion

Pasadena Star News

By: Cynthia Kurtz

Posted 2/20/2013

If you must drive the I-10 freeway -- and I do mean “must” because no sane person would choose to take this freeway if he or she had an alternative -- you know what a nightmare it can be. Planning to be somewhere on time is pretty much a crap-shoot. The same trip can take 25 minutes or 125 minutes depending on weather, construction, traffic and accidents. One never knows. So I support Metro’s decision to open a HOT lane stretching from the 605 to the 710 that will provide an option for solo drivers. 

HOT lane stands for “High Occupancy Toll” lane. It is a system of variable pricing, based on the amount of congestion on the road, to control the number of cars using the lane. The higher the demand the higher the toll - like theatre tickets that are more expensive on Saturday night due to the higher demand for seats.

HOT lanes aren’t a new idea. There are used in Houston, Minneapolis, Salt Lake City, Denver and San Diego. Beginning February 23, we get to test them in the San Gabriel Valley.

To use the HOT lane you need to have a transponder or a FasTrak. It is a small device that attaches to your windshield and permits the overhead monitors to record how many miles you travel in the lane then deducts the toll from your prepaid account. No stopping for toll booths. The toll will vary between $.25 and $1.40 per mile for solo drivers. Carpools won’t be required to pay a toll but they still need to have a FasTrak.

The toll at any time will be posted so you will know the cost before you decide whether to use the lane.  Once you are in the lane, your cost per mile will stay the same even if the toll changes. If the average speed in the HOT lane goes below 45 miles an hour, the sign will change to “HOV only” telling solo drivers they may no longer enter the lane. 

Not everyone is a supporter. Some drivers believe freeways must be “free.” Actually the name “freeway” means a controlled access road with no traffic signals, intersections or driveways so it is free flow. It doesn’t mean no cost.

Others believe the gas tax not tolls should pay for roads. The reality is that the gas tax covers a small percentage of the cost of our highway system today. As our cars get better mileage and we move to more electric vehicles, the gas tax will play an even smaller role in funding the road system.

Opponents also say that this is only an option for the rich. However, based on the experience in other places, people in all income groups use HOT lanes.

A HOT lane isn’t going to solve all the problems on the I-10. The freeway needs new interchanges, resurfacing, and many other improvements. But the HOT lanes will help. Revenues from tolls will be dedicated to improvements on the I-10.

Southern California has a big congestion problem and frankly we don’t have a lot of options. We aren’t going to be adding many new roads, it is too expensive. Buses are a great alternative but they don’t work for every trip. I am a big supporter of light rail but it takes a long time to build. Funding for the first phase of the Gold Line was approved by the voters in 1980. Thirty-two years later and we are almost to Azusa.

So we must also look to technology and pricing to make our current system work better. Visit www.metroexpresslanes.net to open your FasTrak account today. I’ll be looking for you in the fast lane.

Time for the penny to be retired

Pasadena Star News

By: Cynthia Kurtz

Posted 2/13/2013

I think it is time to retire the penny. Much to my surprise, this is a hotly contested issue so I should be clear that this is not the position of the San Gabriel Valley Economic Partnership. The Partnership has no official position on the penny. This is my position and I am ready to defend it.

I don't hate the penny. I have a penny jar that gets turned in for a few bucks every so often. I still pick up pennies when I see them on the street...just in case they do bring good luck. It's not that pennies make my wallet too heavy although after I put them in the penny jar I do notice a significant weight difference with no appreciable difference in purchasing power. 

My opposition to the penny is based on dollars and cents - making a shiny new penny costs 2.4 cents. That's right; a penny can't buy a penny. In 2011 the U.S. Mint made five billion pennies - a total of $50 million in currency. To make that $50 million the taxpayer has to come up with $120 million. This is not how we should spend our tax money when we are talking about cutting things like school lunch programs and military pay. 

It reminds me of two friends, Bob and Jean, who meet on the street. Bob asks Jean "How is business?" Jean responds, "I'm losing a dollar on every widget I sell." Bob replies, "That is terrible, how do you make up the difference?" Jean responds, "Volume."    

Government can't always operate like a business but there are basic principles of business and economics that do apply. Paying more than something is worth isn't sustainable for either the public or the private sector. 

Still there is organized opposition to retiring the penny. Opponents fear that businesses will have an incentive to round up causing prices to increase. Experience provides the best response. There was a U.S. 1/2 cent coin until 1857. It was eliminated without inflationary impacts. Coins have been phased out in the U.K., New Zealand, and Australia without dire economic effects.

Some penny fans are opposed to its demise because the penny honors Abraham Lincoln. May I remind those of you with this sentiment that our 16th President is also on the five dollar bill. Abe deserves more than a wasteful penny.

Others cite its historical significance and claim it is unpatriotic to get rid of the penny. The Department of Defense stopped using pennies on overseas military bases 30 years ago because it was too expensive to ship them. They didn't think it was unpatriotic.

One of the leading opponents to getting rid of the penny is the company which provides the zinc blanks to the U.S. Mint for pressing pennies. I understand this could be a serious setback for their business model but with the demand for metals increasing around the world and the price of zinc having doubled in the last five years, there will be other outlets for their zinc products.

There is one augment against getting rid of the penny that does make "sense" to me.  Without pennies we would have to make more nickels and it costs almost a dime to make a nickel. I have a solution for that problem as well, but it may be best to just take on one coin at a time.

Economic Census provides valuable data for business

Pasadena Star News

By: Cynthia Kurtz

Posted  2/06/2013

This is a friendly reminder for all businesses who received the Economic Census form in November or December - there is just a few days left to fill it out and send it back to the U.S. Census Bureau before the February 12, 2013 deadline.

This isn’t the census that counts people. This census form is sent to nearly four million U.S. businesses asking for operational and performance information. Filling out forms is never fun but in this case, it is very important. 

The Economic Census collects the most complete data available about the nation’s private non-farm businesses. The Economic Census provides the basis for measuring the Gross Domestic Product (GDP) as well as statistical information on output for industry sectors and details on local economies such as industry type, employment, payroll and revenues. 

Government agencies, Chambers of Commerce, and business organizations like the San Gabriel Valley Economic Partnership use the census data for developing public policy, assessing emerging business sectors, and planning business development activities.

The Economic Census provides a wealth of information for business owners to use in gauging their competition, comparing employee output, researching local business markets, and improving business performance.

The U.S. Census Bureau began gathering information about businesses in 1810 as part of the Population and Housing Census. It wasn’t until 1905 that a separate census for collecting only economic data was introduced. Now the information is collected every five years at the end of years ending in “2” and “7”.

 

While much of the information gathered is kept in the same categories in order to measure historical trends, it is also necessary to make changes to reflect changes in the marketplace.  For example, this year the census will introduce new categories to identify separately businesses in renewable energy such as solar, wind, biomass and geothermal power generation from other electric generating companies. 

Similarly, business types that were formerly recorded separately may be merged. In the 2012 census, retail sales of TVs, cameras and computers will be combined into the single category of “electronic stores.”

In order to streamline the process and make responding easier, the 2012 census offers businesses the option of reporting on-line for the first time.

All the information received is strictly confidential and used only for statistical analysis and reporting. Individual businesses are never identified.

The statistical information will begin to be released in December 2013 when the “Advance Report” will become available with preliminary totals by industry sector. More detailed information will become available over the next few years. 

Since this is the first census since the economic meltdown of 2008, the information will be even more important for supporting the recovery. So fill out those forms and hit “send.”  We are counting on the selected businesses to make the census data for 2012 as complete as possible.