BizFed survey reveals top concerns

Pasadena Star News
By: Cynthia Kurtz
Posted 5/29/2013  

This week the Los Angeles County Business Federation (BizFed) released its 2013 business survey results. BizFed is composed of over 100 business associations like the San Gabriel Valley Economic Partnership and chambers of commerce from every corner of Los Angeles County. Their sole purpose is to advocate on issues important to business and they are very good at what they do.

Every year they conduct a poll to “take the pulse of business owners and executives and find out key issues of concern that they deem most critical to the ongoing operation and growth of their business.” 

The 2013 survey contained responses from a wide variety of businesses - 47 percent were CEO’s or business owners, 34 percent represented closed corporations, 23 percent were individual proprietors and 22 percent were business organizations. 

The questions covered 19 topics from infrastructure to immigration and water to worker’s compensation insurance. Five issues clearly stood out as critical.  For the third year in a row taxes and fees were the number one concern. Government at all levels is having trouble paying for services and investing in public infrastructure. In order to maintain service levels they turn to fees and taxes at just the time when businesses are least able to pay.

The second ranked issue - also for the third year in a row - is government regulations.  Clearly this is closely related to fees and taxes. Even though government struggles to meet their current obligations, federal and state regulatory agencies are adding new rules. Someone has to pay for implementing the new rules and the first answer is usually a new fee.

It is easy to see the conundrum we find ourselves in. We can’t afford what we have on the books today but we continue to add new regulations. As if that weren’t enough, there is another aspect of the rules, fees and taxes puzzle that is equally perplexing.  New regulations are developed without much thought given to what they will cost or who will pay for them - and that is by design. 

As an example, last week I was invited to a meeting with representatives from the State Water Resources Control Board. They are looking at new trash regulations and wanted to get input from a variety of interested parties. Good questions about cost effectiveness and who will pay were raised but the representatives told us that while they agreed that those are important questions, they were not allowed to consider them in their rule-making. They just promulgate “effective’ rules that fall to some other agency, presumably local governments, to implement and pay for or force the private sector to pay for. 

No one can think that this is a good way of doing business. It is like buying a $250,000 Bentley because it is the best car made without looking at the sticker price or considering how one will pay for it. Of course in that case a car can be returned. Unfortunately there is no return policy on shortsighted regulations. I am not sure who decided that cost and funding should be considered independent of developing the regulations but it is past time to reconsider that decision.

Sorry but space prevents me from letting you know about the other three top issues from the survey so look for those in weeks to come.

Leisure/hospitality sector picking up

Pasadena Star News 
By: Cynthia Kurtz
Posted 5/15/2013  

When the temperature hits 100 degrees, we all start thinking about vacation - where to go and what to do. Being a tourist is great fun. 

Tourism also provides a big boost to the local economy. It is an industry that brings dollars into a city and region and creates jobs without being a big drain on local services. Yes, a big event requires extra police and fire but most large events cover those costs not the local budget.  

When the recession hit in 2008, hotel and tourist spending took a huge plunge. With dwindling discretionary dollars, families decided to travel less and recreate closer to home. The "staycation" was invented. Conferences and travel were the first line items to get axed from business budgets. But recent economic studies show that individuals and businesses “can’t wait to get back on the road" again. That is good news for the San Gabriel Valley.

Half of the new jobs created in the San Gabriel Valley in 2011-2012 were in the leisure and hospitality sector - 3,000 new jobs. Retail trade, which also benefits from tourist spending, was second adding 1,800 positions.

Last week the Pasadena Center Operating Company (PCOC) released a report that demonstrated how important tourism is to our local city economies. PCOC oversees Pasadena's conference center, visitors’ bureau and historic auditorium. They hired an independent hospitality consulting company (PKF Consulting) to look at the economic impact from overnight visitors.  

PCOC was interested in whether tourism was rebounding and if their expanded convention center which opened in 2009 was having a positive economic impact. The answer to both questions is a resounding yes.

PFK Consulting found that in Pasadena between 2009 and 2012, occupied hotel and motel room nights jumped by 15.5 percent, number of nights out of town guests stayed in private homes grew by almost 10 percent, and total visitors days increased by just under 13 percent.

Translating those visits into dollars and cents creates some big numbers. Direct visitor spending in 2011 equaled $365.7 million. The total economic impact of tourism to the City of Pasadena is estimated to have been $475 million.

Congratulations Pasadena and PCOC. Keep up the good work.

With summer almost here and everyone thinking about fun and vacations, you can find out what is happening at the Pasadena Convention Center and venues around the San Gabriel Valley by logging onto www.DiscoverSGV.com. The calendar will guide you to the best of the best activities for you, your family, and your out of town guests.  And you will have the satisfaction of knowing you are helping the local economy.

 

Immigration decline to affect boomers

Pasadena Star News

By: Cynthia Kurtz
Posted 5/07/2013
 

The “Baby Boomer” generation, of which I am a card carrying member, has been disrupting the world for 60 years. Between 1946 and 1964, the years generally defined as the Boomer generation, 75.8 million Americans were born.

The sheer size of the Boomer contingent meant that there weren’t enough schools, houses, roads or just about anything else. Because of the Boomers, education became a national priority, the suburbs were born, and houses were redesigned to add “family rooms”.

Boomers fought for civil rights, defined the “60s” and were generally responsible for the economic growth of the 1990’s using their disposable income for entertainment, electronics, luxury goods, and travel.

So it was no surprise when Dowell Myers, professor of policy, planning and demography at the USC Sol Price School of Public Policy told the audience at the San Gabriel Valley Economic Partnership’s 2013 Forecast that we are about to experience a soaring senior ratio... after all a Boomer turns 50 every 7 seconds. However, it was the other news from Professor Myers that surprised the audience and made the Boomers in attendance a little nervous about how their “golden years” were going to work out.

For decades demographic projections have predicted continued population growth in the country and in California. We knew that families were getting smaller but we thought there were more families and it would work out. We believed our real ace in the hole was immigration. People were moving here from foreign lands and from other states. In fact, immigration was expected to accelerate.

The reality is much different. You may be thinking to yourself, well we just had a recession so of course we had a slowdown in immigration but that will change as the recession ends. That would be a good theory if the decline in immigration rates had begun when the recession began.  

Not so. Annual net immigration to Los Angeles County peaked in 1990, peaked in California a few years later and began to decline in the U.S. in the early 2000’s long before the recession started.

The magnitude of that change is startling. Just five years ago, in 2007, the California Department of Finance projected that Los Angeles County would reach 12 million people in 2030. In 2013, their new projection is that the 12 million population number will be reached at least 30 years later - sometime after 2060. 

Okay, maybe this is a good thing -- Less traffic, less development, easier to get into our favorite restaurant. But there is that point Professor Myers made about the soaring senior ratio.  

The percentage of residents age 65 to 74 is growing in almost every city in California including the San Gabriel Valley. We Boomers are expecting to sell our homes, collect our Medicare, and enjoy the good life. However, that requires a younger, more productive workforce that can buy our homes and pay for those services. With a declining native growth rate and reduced immigration that workforce isn’t being nurtured in the numbers California must have to maintain a vibrant economy.  

It is very clear what Boomers must do. We need to fix the immigration policy. We need to give foreign students who are educated at our great SGV schools the opportunity to build their businesses here. We need to invest in training our youth to enhance their skills and productivity. And we need to make it easier to operate businesses in this state so businesses can create jobs. Come on - we’re the Boomers - we can do this.

 

Partnership strongly supports A.B. 1257

Pasadena Star News

By: Cynthia Kurtz
Posted 5/01/2013

Butcher, baker, policymaker - a California legislator has a lot of jobs. Constituents pay close attention when the Legislature is spending money or debating new regulations but when the discussion is about a new policy the hearing room is often empty.   

Policy bills get a back seat because usually they don’t dramatically affect us immediately. When there are so many issues that need immediate attention, our natural instinct is to gloss over those that we think can wait. But each day the future is being formed and that is precisely why it is so important that we try and set good policy now.

 

A case in point: We all recognize that natural gas plays an important role meeting California’s energy needs, that it is a clean fuel, and that we aren’t dependent on non-friendly foreign countries to supply it.  The National Regulatory Research Institute, the research group for public service commissioners who regulate state utility services, recently issued a report saying, “As California transitions its energy infrastructure to one that is more environmentally friendly, natural gas holds promise as a fuel that can complement the state’s cap-and-trade program, energy efficient measures, and transition to renewables.”

It sounds great but California lacks a long-term strategy for maximizing the benefits of using natural gas and without a blueprint, without a policy, opportunities will be missed. 

To remedy that omission, the San Gabriel Valley Economic Partnership supports AB 1257, the Natural Gas Policy Act, authored by Assemblymember Raul Bocanegra. It would require the state to develop a long term strategy to maximize natural gas as an energy source. Among other uses, the Act calls for assessing strategies to use natural gas as a transportation fuel. To date the use of natural gas in Southern California is dramatically reducing harmful emissions, removing the equivalent of 525,000 gasoline powered cars off the roads.

AB 1257 requires the California Energy Commission (CEC) to prepare a report identifying how to optimize the advantages of using natural gas in meeting the state’s energy needs by January 1, 2015 and then update that report every four years. 

This should help drive the development of not only natural gas but other renewable fuels as well.   According to the Center for Strategies and International Studies (CSIS), a bipartisan public policy research institute, natural gas “is an essential partner to the development of renewables, providing cleaner, reliable backup power when the sun is not shining or the wind dies down.”

There are long term benefits for our economy. California companies filed 41 percent of all patents for renewable-energy innovation nationwide from 2008 to 2010. Natural gas is a component of the renewable industry and a comprehensive natural gas policy can attract new business and clean-tech startups to California, injecting new life into the state’s reputation as a center for innovation.

According to the 2009 Global Insight report, the natural gas industry can become a booming sector that can bring important investment capital and major technology companies to California. Just like California’s clean tech industries attracted a record $3.5 billion in venture capital in 2011, California’s natural gas industry can also attract venture capital. And a policy that commits to a long term plan to maximize the benefits of natural gas will help attract more capital.

Let’s make sure we have the right policy, like AB 1257, in place.