Solving California Challenges Requires Collaboration – Grace Evans Cherashore at Sacramento Host Breakfast

Collaboration is the key to finding solutions to the tough challenges facing the state, California Chamber of Commerce Chair Grace Evans Cherashore told attendees at the 94th Annual Sacramento Host Breakfast yesterday.

Cherashore, executive chairwoman of Evans Hotels, cited the housing crisis, pension fund reliability and transportation infrastructure as among the areas in which collaboration would be helpful.

She commented that Governor Gavin Newsom (who spoke after her at the breakfast) has correctly identified housing availability as a crisis.

“We need to build a lot more units,” Cherashore said. “Government subsidies cannot fund enough to make a dent in our housing shortage. Private investment capital must also be attracted so we can fund more projects.”

Cherashore pointed out that the time to complete construction projects of all types in California is longer than in other states due to frivolous lawsuits being used to slow housing and infrastructure projects, even when they comply with existing community land use plans.

“If we are to relieve our housing shortage, many constituencies are going to need to come together and collaborate and put aside long-held beliefs,” she said. “We need to work together on this. A few sacred cows are going to have to go by the wayside.”

Pension Liabilities

Public pensions are a concern for California as a whole, Cherashore said. “How can we keep the promises we have already made to our teachers, police officers, firefighters and librarians?” she asked.

“Their vested retirement benefits far exceed any rainy day fund.” Some estimates put the vested retirement benefits at 10 times the rainy day fund.

“We can’t solve this problem by cost cutting alone,” Cherashore said. “The magnitude of it just makes that economically unfeasible and impossible. We must grow the economy, if we wish to grow GDP. And we must grow GDP in order to increase tax revenues.”

Regional Cooperation

“Californians can collaborate to solve regional challenges,” Cherashore said. As an example, she pointed to how runway limitations at San Diego International Airport were resolved as “private and public entities collaborated to build the Cross Border Xpress, a bridge that connects the Tijuana Airport with a terminal on the U.S. side.”

The binational strategy has expanded international direct air options for San Diegans and Mexicans, not just for heading south, but also nonstop service to China.

Cherashore gave other examples of cross-border collaboration in the “Cali-Baja Mega Region,” including manufacturing—in which production of a medical device may entail multiple border crossings for components before the final sale of the device. Co-production also involves the services sector, in increasingly high-value services, including computer systems design, data hosting and scientific research.

The cross-border economic relationship “can play a positive role in our state, as it has directly in the Cali-Baja Mega Region,” Cherashore said. “It can expand economic opportunities and enhance the lives of residents on both sides of the border, in both Mexico and the U.S. I invite you all to come down and see!”

In closing, Cherashore said: “Governor Newsom, the CalChamber and the business community stand ready to work with you to address some of the long-term challenges we have here in the State of California.”

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