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California's growth has 'flatlined,' Lt. Gov. Gavin Newsom says at SLO event

From left, Lt. Gov. Gavin Newsom, State Controller John Chiang, State Sen. Sam Blakeslee and Fred Keeley of California Forward participate Friday in the San Luis Obispo Chamber of Commerce's State of the State event at Grace Church. Not pictured is George Soares, a government advocate with Kahn, Soares and Conway.
From left, Lt. Gov. Gavin Newsom, State Controller John Chiang, State Sen. Sam Blakeslee and Fred Keeley of California Forward participate Friday in the San Luis Obispo Chamber of Commerce's State of the State event at Grace Church. Not pictured is George Soares, a government advocate with Kahn, Soares and Conway. jjohnston@thetribunenews.com

Budget cuts to higher education have put state colleges and universities in a “code red” situation that must be addressed, in part, through the governor’s proposed tax hike, Lt. Gov. Gavin Newsom said Friday in San Luis Obispo.

“I can’t figure out another way of resolving this issue of $200 million of additional cuts which will precipitate new tuition increases,” Newsom said, referring to the cuts the California State University and University of California systems would each face if the tax plan fails.

Newsom was one of five speakers to share their outlooks on California’s economy during the San Luis Obispo Chamber of Commerce’s inaugural State of the State event.

Other speakers included state Controller John Chiang, state Sen. Sam Blakeslee, Fred Keeley of California Forward, a nonpartisan government reform group, and George Soares, a government advocate with the law firm Kahn, Soares and Conway.

Topics included Gov. Jerry Brown’s tax plan, more funding for education, and the influence of special-interest groups on state politics.

Brown is gathering signatures to put a ballot proposal to voters in November to temporarily increase income taxes on Californians earning more than $250,000 and to raise the sales tax by half of a percentage point.

In order for Brown’s tax proposal to pass, however, the public must have increased trust and confidence in government, Keeley said.

“The conversation is, have we done enough so that people believe if we raise their taxes the money is going to be well spent?” he said.

Soares agreed that, without confidence, the proposal “isn’t going to go down easy.”

Without the fiscal crisis, he noted, California would have continued to spend money it doesn’t have, and the state now has an opportunity to solve the problem.

“This university is going to be in jeopardy if we don’t straighten this mess out,” said Soares, a Cal Poly graduate.In his keynote address, Newsom cautioned that California has “rested on its laurels” over the past three decades, during which growth dropped and the state “flatlined.”

As of December, the statewide unemployment rate hovered around 11 percent statewide and at 8.8 percent in San Luis Obispo County, according to the state Employment Development Department.

“We have become average, and this state is not about being average,” Newsom said.

Chiang noted that the last time California operated without a cash deficit was July 12, 2007.

To get back on track, he said, California needs a skilled workforce that has opportunities for lifelong learning; business owners, potential home buyers and others need to be able to access financial capital; and the state needs to invest more money in its aging infrastructure.

Blakeslee, a Republican representing San Luis Obispo, said state leaders need to make changes to California’s regulatory, tax and legal systems to compete globally.

He also criticized special-interest groups’ influence in the Legislature. Blakeslee has been a proponent of measures designed to limit special-interest gifts to legislators and in December introduced a political reform package.

“At the end of the day, we’re all charged with solving these problems,” he said. “At the end of the day, our friends, our families will judge if we were strong enough to reach across the aisle and do the right thing.”

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