Fields surround El Centro in Imperial County
A state commission has urged California leaders to help bridge the economic gap between coastal and inland regions. Here, fields surround El Centro in Imperial County, east of San Diego. Aerial photo courtesy UC Riverside

California must do more to promote inclusive and sustainable regional economic growth by prioritizing resources for underserved regions, a state watchdog panel has found.

The report by the Little Hoover CommissionEquitable Economic Development Across California, examines how state government can promote inclusive growth in California’s less prosperous regions.

The commission highlights disparities in income, employment and opportunity that exist between California’s coastal cities and its rural and inland regions. 

“In recent decades, knowledge-based economies in California’s coastal cities have surged ahead, while less-diversified economies in the state’s rural and inland regions have not shared in this prosperity,” says Commission Chair Pedro Nava. “California must do more to address these regional disparities and support the communities in our state that have been left behind.”

Governor Gavin Newsom and state legislators have shown support for inclusive regional economic growth, including investing $600 million in the Community Economic Resilience Fund (CERF). California also is poised to support regional collaboratives as they develop and implement inclusive development strategies.

The commission, however, outlines several challenges that threaten the fund’s ability to significantly impact regional economies, including ensuring that regions receive the scale of investment necessary to change their economic trajectories, and coordinating the range of state programs that can offer support.

“The commission applauds CERF’s emphasis on inclusive and community-centered economic planning,” says Commissioner Bill Emmerson, who serves on the commission’s subcommittee on equitable economic development. “Yet with such a broad range of goals and limited funding, CERF risks losing its ability to tackle any of its priorities effectively.”
To provide greater strategic clarity to the program, the commission called on the state to focus CERF more clearly on the creation of quality jobs in sustainable industries with high-growth potential. The state also should prioritize connecting members of disadvantaged communities with new high-quality jobs.

To better support regions as they seek to execute economic development strategies, the commission urged the state to help align resources, incentives, stakeholders and regulatory agencies around regional opportunities.

The commission further recommends that the state create a single, senior point of leadership for regional economic development.

In addition, the commission found that some regions and subregions need substantially more support, leading members to call on the state to prioritize historically disadvantaged regions within CERF and relevant programs.
“California’s is a story of two economies,” says Commissioner Gil Garcetti. “In order to better address longstanding inequities and close regional disparities, state leaders must direct CERF and related resources to the regions that need them the most.”

The commission outlines additional recommendations, including investing in regional capacity for inclusive development and institutionalizing the reporting of metrics relating to the health of regional economies and economic disparities.

The Little Hoover Commission is the nation’s only independent citizens commission working to improve state government. A nonpartisan oversight agency created in 1962, it includes 13 commissioners appointed by the governor and legislative leaders.

The commission has two other 2022 publications on inclusive economic growth, Major State Programs That Can Support Regional Economic Development and Using Data Tools to Compare Regional Economic Well-Being in California.