Inland Empire Outlook

Inland Empire State Legislative Races in 2010

No Comments 29 June 2010

In the Inland Empire, 2010 is shaping up to be an unusually competitive year for state legislative elections. Due to term limits and resignations, several of these elections have no incumbent on the ballot. A changing electorate and a difficult economic climate also bring new dynamics to the races. The election season kicked off with an April 13 Special Election to replace former State Senator (now Supervisor) John Benoit in Riverside County’s Senate District 37. Republicans Bill Emmerson and Russ Bogh combined to spend over $1 million and outside groups including tribes and unions collectively spent at least $1 million more on this hotly contested race. After a contentious campaign, Emmerson outpolled Bogh and will now advance to a June run-off. The June Primary in Assembly District 59, which spans San Bernardino and Los Angeles Counties, is also expected to be highly competitive. Assembly District 36, also shared between Los Angeles and San Bernardino Counties, saw a surprisingly close 2008 election. The Democratic Party hopes to make it competitive again this November.

SD-37

California’s State Senate District 37 encompasses most of Riverside County, including the Coachella Valley. The district starts in Norco and Corona, swings south to include Lake Elsinore and Perris, north to Moreno Valley, eastward through Hemet, San Jacinto, Calimesa, Beaumont, and Banning, and then continues into the Coachella Valley cities of Desert Hot Springs, Palm Springs, Rancho Mirage, Palm Desert, Indian Wells, and La Quinta. To the East, it extends all the way to the Arizona border. The district’s population in the 2000 Census was approximately 8 percent African American and 31 percent Latino. According to Secretary of State’s most recent Statement of Registration, the district has 462,132 registered voters—37 percent are registered Democrats and 41 percent are registered Republicans, 17 percent are decline to state and 5 percent are registered with minor parties. Latino voter registration has increased by 4 percentage points since 2007, and is now 23 percent, according to the California Target Book.

After John Benoit resigned in November 2009 to become a Riverside County Supervisor, candidates scrambled to prepare for the special election. The first Republican to declare his candidacy was Assemblyman Bill Emmerson (AD-63). Emmerson’s Assembly District is in San Bernardino County and he faced charges that he was running as a carpetbagger in the Riverside County Senate District. (Emmerson switched his voter registration from Redlands to Hemet shortly after Benoit was appointed to the Riverside Board of Supervisors.) Emmerson’s leading opponent was former Assemblyman Russ Bogh. Bogh had lost to Benoit in the 2008 GOP primary. This time, Emmerson defeated Bogh by a 42-22 percent margin. On the Democratic side, Justin Blake, a member of the Palm Springs USD Board of Education, emerged as the leading candidate with 14 percent of the vote. Emmerson, Blake, and American Independent candidate Matt Monica now advance to the run-off.

Although the district leans Republican, it is not a completely safe for the GOP. President Barack Obama won this district by 2 percentage points in 2008. Democrats also have a plurality in some key cities in the district. Of Moreno Valley’s 64,114 registered voters, 49 percent (31,425) are registered Democrats compared to the 29 percent (18,733) registered Republicans. In Palm Springs Democrats are 49 percent (11,037) of the district’s voters, while Republicans are 31 percent (6,956). Nevertheless, Emmerson is favored to win the run-off.

AD-36

The 36th Assembly District joins the Los Angeles County cities of Lancaster and Palmdale with the San Bernardino County cities of Adelanto and Victorville. The district’s population is approximately 52 percent white, 30 percent Latino, 12 percent African American, and 3 percent Asian. Latino voter registration increased by 5 percent to 25 percent between 2007 and 2009.

Although this district has been controlled by the GOP since its creation in the 2001 redistricting, the 2008 General Election saw a surprisingly close race. In 2008, Republican Stephen Knight beat Democrat Linda Jones, 52 percent-48 percent. Although Knight’s campaign believes the close call was due to its minimum effort, Jones garnered a large percentage of the vote despite spending less than $50,000.

Three Democrats will be on the primary ballot. Linda Jones has filed again, as has her competitor in the last Democratic Primary, Maggie Campbell, who lost to Jones 80 percent-20 percent last time. The new candidate is Shawntrice Watkins, an LAPD officer.

The general election could be competitive. Latino and Democratic registrations have increased, leaving Republicans with only a 138 voter advantage among registered voters in January 2010. Three of the four cities in this district have a Democratic plurality. Registered Democrats have a plurality in Palmdale, 44 percent to 35 percent, in Adelanto, 49 percent to 25 percent, and in Victorville, of 43 percent to 33 percent. In Lancaster, Democrats make up 39 percent of the registered voters while Republicans have a slight plurality with 40 percent of the registered voters. Decline to State voters, who comprise 17 percent of the district’s registered voters, will decide the winner of this Assembly District in November.

AD-59

California’s State Assembly District 59 is split almost exactly in two between 123,000 registered voters in San Bernardino County and 127,000 registered voters in Los Angeles County. In Los Angeles County, the district includes the cities of Bradbury, Claremont, Glendora, Hesperia, La Verne, Sierra Madre, a small portion of Arcadia, and most of Monrovia, San Dimas, La Crescenta-Montrose, and the Angeles National Forest. In San Bernardino County, the district includes the town of Apple Valley and the City of Hesperia, as well as a portion of Highland, a small portion of the city of San Bernardino, and the San Bernardino National Forest, including Lake Arrowhead and Crestline. The district’s population in the 2000 Census was 65 percent Caucasian, 5 percent African American, and 21 percent Latino. As of January 2010, the district has 249,810 registered voters, 35 percent of which are registered Democrats and 43 percent are registered Republicans. In the 59th Assembly District McCain outpolled Obama in the 2008 Presidential Election 51 percent to 47 percent.

Conservative activists attempted to recall the incumbent, Anthony Adams (R-Hesperia), following his vote for the budget bill in 2009, but they failed to qualify the recall for the ballot. Following the recall controversy, Assemblyman Adams decided not to seek reelection. Five Republicans have entered the race for the GOP Primary. Ken Hunter, Michael Rogers, Corey Calaycay, and Chris Lancaster, Anthony Riley, Iver Bye, and Tim M. Donnelly have all submitted Statements of Intention. In the 2006 Republican primary, Christopher Lancaster lost to Adams despite spending nearly $200,000, $100,000 of which was his own money. Nevertheless, Adams won by a nearly two-to-one margin, 5,584 votes for Lancaster and 10,997 for Adams. As of March 24, 2010, Lancaster had spent $56,111 on the 2010 election and still has $70,513 cash on hand. The other Republican candidate to have reported funds is Claremont City Councilmember Calaycay, who spent $18,681 by March 24 and has $54,416 cash on hand.

The Democratic candidate is Darcel Woods, an instructor at Chaffey College. As of March 24, 2010, Woods had spent only $4,304 and had only $5,825 cash on hand.

Although this district has traditionally been fairly safe for Republicans, GOP registration has decreased by 5 percent since 2002, from 48 percent to 43 percent. Yet Republicans maintain an 8 percent advantage over Democratic registration. AD 59 promises to be one of the most competitive June primaries in the state, but is expected to stay safely Republican in November.

SD-32

The 32nd Senate District consists of cities in San Bernardino County plus Pomona in Los Angeles County. It includes Montclair, Ontario, Fontana, Rialto, Bloomington, Muscoy, 80 percent of the city of San Bernardino and 89 percent of the city of Colton. In the 2000 Census, the district was 59 percent Latino, 12 percent African American, and 4 percent Asian. Since 2007, Latino voter registration in this district has increased by 8 percent, reaching 48 percent in 2009. The overall voter registration also increased from 289,860 total voters in 2006 to 302,105 total in 2009. Registered Democrats increased from 48 percent to 51 percent in January 2010, while registered Republicans decreased from 33 percent to 27 percent.

The Democrat Gloria Negrete McLeod ran unopposed in the 2006 General Election for this seat, and if she wins this year, she will not be termed out until 2014. McLeod was first elected to the Assembly in 2000 and termed out in 2006, when she won this Senate seat. For this upcoming election, McLeod has a huge war chest, with over $943,000 cash on hand. Compared to Senate District 37 and Assembly Districts 36 and 59, Senate District 32 will be quiet this election year. With this large sum at her disposal, however, McLeod is rumored to be running against San Bernardino County Supervisor Gary Ovitt next year. She denies any such plans.

Economic Analysis, Political Analysis

Looking to the Long Term

No Comments 15 April 2010

Our inaugural issue (Winter 2010) examined how the Inland Empire was facing one of the most severe recessions in history. This issue continues that analysis, but also notes how some sectors are looking beyond the recession and investing in the future.

To help assess the prospects for growth and investment in the Inland Empire, we have developed two new economic indices specific to the region. Our Inland Empire Coincident Economic Index (CEI) provides information about the current state of the economy, and our Inland Empire Leading Economic Index (LEI) seeks to predict future economic conditions (p. 2). There is no question that the Inland Empire will continue to struggle to recover. Commercial real estate vacancy rates have been rising (p. 12) and trade volume has been decreasing (p. 14). However, the indices we are developing will help businesses position themselves for the region’s eventual recovery.

Turning to the public sector, we discuss how the City of Riverside, the Inland Empire’s largest city, is seeking to maintain innovative policies during a period of reduced revenues (p. 8). Under Mayor Ronald Loveridge’s leadership, Riverside has continued to make strategic investments in infrastructure, technology, the environment, and the arts. Meanwhile, some of the region’s Native American tribes, including Agua Caliente, are seeking to diversify their business enterprises to sustain future growth (p. 18), and candidates for the California state legislature in Inland Empire districts are debating how to promote economic recovery (p. 20).

The publishers of Inland Empire Outlook are also looking to the future. The Rose Institute of State and Local Government and the Lowe Institute of Political Economy have recently launched the Inland Empire Center for Economics and Public Policy. The new center is designed to provide the Inland Empire with expert analysis of the region’s political and economic trends. In one of its first ventures, the center has formed a partnership with the UCLA Anderson Forecast, California’s premier economic forecasting organization. This affiliation will combine the experience of the UCLA Anderson Forecast with the Inland Empire Center’s specialized knowledge of the region. As part of this collaboration, the Inland Empire Center and UCLA Anderson Forecast plan to co-host conferences featuring topics of special concern for the Inland Empire at local venues in San Bernardino and Riverside counties. The conferences will help establish the UCLA Anderson Forecast/Inland Empire Center partnership as the preeminent source for economic and political analysis of the region.

Political Analysis

Riverside: An Innovative ‘Capital City’

No Comments 15 April 2010

The City of Riverside serves as the unofficial capital of the Inland Empire. Founded in 1870 and incorporated in 1883, Riverside has long been the Inland Empire’s most populous city, the seat of government for Riverside County, and a major supplier of jobs for the region.

Riverside is also the Inland Empire’s largest center of higher education. It is home to several colleges and universities, including the region’s University of California campus. U.C. Riverside is the city’s largest economic and cultural asset—a research and teaching center with nearly 20,000 students and a large, highly-educated faculty and staff. UCR will soon provide the city another major asset when it opens a new medical school in 2012—the first new public medical school in California in over forty years. In many ways, the region’s future is tied to the fate of this important city.

An Innovative City

Riverside is led by Mayor Ronald Loveridge, a UCR political science professor who first won election to the city council in 1979 and rose to the office of mayor in 1994. During Loveridge’s tenure, Riverside has pursued an ambitious plan to distinguish itself from its regional neighbors. Most notably, the city launched a program called “Riverside Renaissance”—a massive $1.57 billion, 5-year investment in public works, utilities, parks, libraries, and other projects. In his 2010 State of the City address, Mayor Loveridge asserted that “we are on track to complete more [infrastructure] projects in five years than were completed over the last 30. I know of no city in California, or elsewhere, with such an ambitious ‘bricks and mortar’ program.”

Mayor Ronald Loveridge

In addition, city leaders have sought to establish Riverside as the region’s center for arts and culture. As part of its capital investment program, the city recently completed a $32 million restoration of Riverside’s historic Fox Theater, now a 1,600-seat Center for the Performing Arts in the heart of the city’s downtown district. While some have criticized the city’s large expenditure on this project, Loveridge has defended it as “Riverside’s signature statement as a City of Arts and Innovation. It is our commitment to artistic excellence and audience enjoyment, for the City, the Inland Empire, and all of Southern California.”

Riverside has also won recognition for its innovative environmental policies. The California Department of Conservation has named Riverside as the state’s first “Emerald City”—a distinction based on Riverside’s commitment to environmental sustainability. To win this recognition, Riverside has committed to pursue specific goals in areas including renewable energy sources, waste management, land use, construction, and transportation. While other California cities such as Santa Monica and Berkeley have pursued environmentally-friendly policies, Riverside stands out as a green city in a red region.

At the same time, the Riverside has sought to position itself as the region’s technological leader. The city has launched the SmartRiverside program, which seeks to attract tech-sector businesses and improve residents’ access to computers and the internet. Through one initiative, the city has worked to close the “digital divide” by soliciting donations of used computers, refurbishing them, and providing them free of charge to low-income families. Riverside also has been a pioneer in establishing a free wi-fi network that provides internet access to most areas of the city. In recognition of these and related projects, Riverside has been selected as one of 21 cities around the world to receive the Smart21 Communities Award.

The Recession’s Impact

Riverside launched much of this ambitious agenda during the recent economic boom, when rising tax revenues filled the city’s coffers with plentiful resources. More recently, Riverside has been hit hard by Inland Empire’s economic bust—the horrific combination of home foreclosures, business failures, and job losses. As a consequence of the recession, the city’s official unemployment rate has neared 15 percent, and property values in the county as a whole have dropped 10.5 percent—the largest decline in county history.

The economic downturn has had a direct impact on Riverside’s finances. Like most cities in California, Riverside raises general fund revenues primarily through state subventions and local levies. Tax levies account for nearly two-thirds of Riverside’s general fund revenues. Within that amount, 35 percent comes from property taxes. This means that more than one out of every five dollars in the city’s general fund comes from property taxes.

Under this revenue structure, the local real estate market greatly affects the city’s income stream. When the recession shocked real estate prices, reductions in property values resulted in lower property tax revenues. High unemployment rates compounded the problem, as declines in disposable income reduced consumer spending, which in turn reduced the flow of sales and use taxes to the city.

California’s severe state budget crisis only made things worse. To patch massive holes in the state budget, the legislature has reduced the funds it normally allocates to local governments. In 2008-2009, for example, the city of Riverside relied on the state to provide 9 percent of its budget revenue. After Sacramento’s 2009 cuts, the Riverside city budget showed that the amount was cut by nearly 5 percent.

Overall, in 2009-2010, the city of Riverside lost over $17 million in general fund revenue. This sharp decline made it impossible for the city to avoid cuts in services.

Last year, the city council made many hard budget choices. It cut allocations to the Riverside Public Library by 19.86 percent; to Parks, Recreation, and Community Services Department by 15.11 percent; to general government by 10.43 percent; and to the police department by 4.56 percent. As part of the reductions, the city eliminated over 16 net full time equivalent positions, and limited authorizations for additional staffing.

Yet, in an interview with Inland Empire Outlook, City Manager Brad Hudson asserted that Riverside has been able to minimize cutbacks and even expand some investments in quality of life thanks to smart fiscal planning and management. He noted that Riverside was able to draw on its budget reserves and tap into revenues from other sources.

Over the years, Riverside has been disciplined in setting aside some of its current general fund budget as a reserve to be used in times of fiscal crisis. In the current fiscal year, the city was able to use over $2 million of its cash on hand to supplement the general fund and buffer against the decline in other sources of revenue.

The city also shifted revenue from profitable sources using interfund transfers, or transfers from one city fund to another city fund. Most importantly, the city reallocated income from Riverside Public Utilities, which has seen increasing revenues in recent years. Riverside Public Utilities has been able to maintain steady returns by providing competitive rates to residential customers and discounted commercial rates to large power users. Earnings from Riverside Public Utilities traditionally feed into the city’s electric and water funds. Last year, however, thanks to fund surpluses, the city was able to move $32.5 million in utility revenues to the general fund.

These moves have allowed Riverside to avoid the draconian cuts now facing many other cities in the state and, at least in the short term, to make ongoing investments in environmental policies, technology, and the arts despite the economic downturn. Riverside hopes that by sticking to its strategy of building a green, high-tech metropolis with a range of cultural amenities, it will attract new businesses, generate jobs, and emerge from the recession more securely positioned as the Inland Empire’s leading city.

Political Analysis

Agua Caliente Seeks to Diversify

No Comments 15 April 2010

The Coachella Valley is home to five tribes—Agua Caliente Band of Cahuilla Indians, Augustine Band of Mission Indians, Cabazon Band of Mission Indians, Torres-Martinez Band of Desert Cahuilla Indians, and Twenty-Nine Palms Band of Mission Indians.

Through development of casinos and other businesses, these tribes have contributed to the economy of the Coachella Valley. But the gaming industry has been hit by the current economic downturn. In 2008, revenues from tribal casinos in California were $7.3 billion, a 6 percent drop from 2007. Inland Empire Outlook met with Tom Davis, the Chief Planning and Development Officer for the Agua Caliente tribe, to discuss how the recession has affected its enterprises.

The Agua Caliente Band of Cahuilla Indians is a Palm Springs-based tribe with approximately 400 members and land covering 31,500 acres. The tribe launched its gaming business in 1995 when it opened its first casino in a tent in Palm Springs. Over the past 15 years, Agua Caliente’s business operations have rapidly expanded to include two casinos, two hotels, a golf course, and a concert center. The Agua Caliente Casino in Rancho Mirage is a large operation, with over 45,000 square feet of gambling space, a 16-story hotel, and the convert venue called The Show. The tribe’s other casino, the Spa Resort Casino, is located in downtown Palm Springs.

After more than a decade of rapid expansion, Agua Caliente, like other casino operators, is facing an uncertain period: fewer people are going to casinos, and those who do are spending less money. This softening demand is making it difficult for casinos to expand. Although Agua Caliente has the option to open a third casino or to renovate and further expand the existing Agua Caliente Casino, the tribe is currently not moving forward with either plan. Page

Agua Caliente and other casinos close to Los Angeles have not been hit as hard as those in Las Vegas or the fringe casinos in Reno. According to Mr. Davis, Agua Caliente has benefited from its unique market position as a destination resort that is an affordable option for Los Angeles residents. Coachella Valley casinos offer a comparable experience to a Las Vegas casino, but since they are closer to Los Angeles, they are a less expensive to travel to and are able to draw customers in the current economy.

In the longer term, Agua Caliente’s casinos also stand to benefit from several new expansion projects, including the I-10 Bob Hope Drive/Ramon Road interchange construction project in Palm Springs. This project is estimated to cost around $35 million. The federal government is covering the majority of the construction costs through the American Recovery and Reinvestment Act of 2009. The new interchange will help decrease traffic congestion and thus help increase the revenue stream that the I-10 provides into the area. Agua Caliente is also investigating initial plans to build an open-air retail center on the west side of the I-10 Bob Hope Drive interchange.

By diversifying into other industries and engaging in new construction projects, tribes hope to minimize the impact of diminished casino revenues. Mr. Davis believes that diversification will be important for long-term sustainability for the Agua Caliente. “We have only been diversifying for about 10-15 years. Because of this, our investments were not enough to insulate us greatly from this economic downturn,” said Mr. Davis, “but as our current projects are further developed and grow to their full potential, they will be able to act as a buffer against a bad economy in the future.”

The tribe has already started diversifying in several ways: it owns leases on over 570 residential properties, two golf courses, and various other non-gaming related real estate. The tribe is dedicated to further diversification, particularly in the area of green technology, including wind power and industrial research. Agua Caliente is also in the process of developing more residential properties, the biggest of which is the construction of 100 town homes in the Village Traditions neighborhood. So far, the tribe has finished the first stage of construction with most of the completed units already sold. In addition, the tribe is hoping to develop homes in the Alexander Village Development, which aims to reproduce classic Hollywood homes from the 1950s and 1960s within a 21-acre community.

According to Mr. Davis, sustainable growth through diversification reflects the tribal “seven generations” principle by which current leaders keep future generations in mind.

Political Analysis

Cost of the Undercount for the Inland Empire

No Comments 15 December 2009

Obtaining an accurate Census count is a challenging task. Doing so is extremely important, however, both for the reapportionment of Congressional seats and allocation of federal funds.

Political Analysis

Congressional Races to Watch in 2010

No Comments 15 December 2009

2010 should be a fairly entertaining political year in California. Indeed, on top of the reality of the Census and the possibility of a Constitutional Convention comes the drama of some potentially close Congressional races, three of which will be contested within the Inland Empire: David Dreier’s (CA-26), Ken Calvert’s (CA-44), and Mary Bono Mack’s (CA-45).

Political Analysis

2011 Means More Reps for Inland Empire

No Comments 12 December 2009

Over the last decade, California’s population center has shifted away from coastal urban centers and moved farther inland. While almost all areas of California have increased in population and most Californians still live in coastal counties, the growth in inland areas has far outpaced that of the coastal region. As a result, when Congressional districts are redrawn following the 2010 Census, the Inland Empire and other inland areas stand to increase their representation at the expense of other parts of the state.

Political Analysis

Ontario: The Inland Empire’s New Urban Center

No Comments 26 November 2009

The City of Ontario has emerged as a hub for the Inland Empire. Ontario has experienced astonishing growth as its population doubled between 1980 and 2000. At the same time, income distribution has also improved, with more residents rising out of poverty and achieving increasingly higher income levels.

Older Entries »

Inland Empire State Legislative Races in 2010

Looking to the Long Term

Riverside: An Innovative ‘Capital City’

Agua Caliente Seeks to Diversify

Cost of the Undercount for the Inland Empire

Congressional Races to Watch in 2010

2011 Means More Reps for Inland Empire

Ontario: The Inland Empire’s New Urban Center

The Rose Report

The Lowe Institute

The Rose Institute

Rose Institute

Lowe Institute