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California 2025California 2025

Elisa BarbourElisa Barbour

Public Policy Institute of CaliforniaPublic Policy Institute of California

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OutlineOutline

•• Population and economy forecastsPopulation and economy forecasts

•• Funding and meeting needs Funding and meeting needs –– Education facilitiesEducation facilities–– TransportationTransportation

•• Governance challengesGovernance challenges

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California population will grow,California population will grow,but at a slower pacebut at a slower pace

0

1

2

3

4

5

6

7

1980-1990 1990-2000 2000-2010 2010-20200

5

10

15

20

25

30

Millions (%)

Absolute change

Percentage change

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Latino population will grow the mostLatino population will grow the most

0

5

10

15

20

25

Latino White Asian AfricanAmerican

Other

2000

2025

Number ofresidents(millions)

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Economic shift to serviceEconomic shift to service--related related industries will continueindustries will continue

-30

-20

-10

0

10

20

Constructi

on

Manufac

turing

Trade

Finance

Insuran

ce

Real E

state

Service

s

2000-20102000-2020

% change in employment in selected industries

Source: UCLA-Anderson forecast

(%)

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The new economy will demand The new economy will demand higher levels of educationhigher levels of educationDemand for workers by educational attainment

0

510

152025

30

3540

Less thanhigh school

graduate

Highschool

graduate

Somecollege

Collegegraduate

% share oftotal

employment

20002020

Source: PPIC dynamic projections with UCLA economic forecasts

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Ethnic groups have very different Ethnic groups have very different education levelseducation levels

50

8

37

45

18

26

0

5

10

15

2025

30

35

40

45

Latino White Asian AfricanAmerican

Other

Percentage of college graduates, ages 25-64, 2000

(%)

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Education of California’s population Education of California’s population not likely to meet economy’s demandsnot likely to meet economy’s demands

Percentage distribution by educational attainment, 2020

1114

3639

22

17

28

33

0

5

10

15

20

25

30

35

40

45

Less thanhigh school

graduate

Highschool

graduate

Somecollege

Collegegraduate

Economy’s demandfor workers

Education levelsof population

(%)

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OutlineOutline

•• Population and economy forecastsPopulation and economy forecasts

•• Funding and meeting needsFunding and meeting needs–– Education facilitiesEducation facilities–– TransportationTransportation

•• Governance challengesGovernance challenges

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California and U.S. infrastructure California and U.S. infrastructure spending are about the samespending are about the same

Per capita state and local capital outlay expenditures

0100200300400500600700800900

1000

1957 1962 1967 1972 1977 1982 1987 1992 1997 2002

Expe

nditu

res

(199

7 pe

r cap

ita $

s)

California total

United States total

Source: Census of Governments Compendium of Government Finances, 1957-1997

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State relies increasingly on bondsState relies increasingly on bondsto pay for public investmentsto pay for public investments

$307 per capita $299 per capita

1965-66 2002-03

28%

42%

28%

2%

77%

14%8%1%2%

28%

42%

28%

1%8%

77%

14%

General fundSpecial fundsBondsFederal funds

Source: California Department of Finance

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Debt servicing requirements may limitDebt servicing requirements may limitstate’s capacity for new bonds in near termstate’s capacity for new bonds in near term

012345678

1992

-9319

93-94

1994

-9519

95-96

1996

-9719

97-98

1998

-9919

99-00

2000

-0120

01-02

2002

-0320

03-04

2004

-0520

05-06

2006

-0720

07-08

2008

-0920

09-10

%

Ratio of general fund debt to revenues

Source: Legislative Analyst’s Office

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Education facilities outlook has improved Education facilities outlook has improved dramatically following institutional changesdramatically following institutional changes

California general obligation education bonds, 2001-2004

0

5

10

15

20

25

State Local State Local

$(billions)

Passed withless than 2/3of the vote

Passed withless than 2/3of the vote

K-12 Higher Education

$21.4 $20.3

$4.0

$9.1

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Despite fluctuations, the trend in demand Despite fluctuations, the trend in demand will rise in all education sectorswill rise in all education sectors

-10

0

10

20

30

40

2000 2005 2010 2015 2020 2025

Total populationCollege age population: 18 to 24 years oldHigh school age population: 14 to 17 years oldK-8th grade age population: 5 to 13 years old

(%)

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-200

-100

0

100

200

300

400

500

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

Highway investment has seriouslyHighway investment has seriouslylagged use and population growthlagged use and population growth

Vehicle miles traveled on state highwaysPopulationState highway lane milesState capital outlay spending for highwaysper vehicle mile traveled (includes federal subventions)

(%)

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California highway investments are also California highway investments are also much lower than the U.S. averagemuch lower than the U.S. average

0

50

100

150

200

250

1957 1967 1977 1987 1997

CaliforniaUS

2002

per

cap

ita $

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For transportation, Californians say For transportation, Californians say they’d rather manage demand than buildthey’d rather manage demand than build

Which one comes closest to your views about planning for 2025 in your part of California?

Expanding mass transitand more efficient use offreeways and highways

Building more freewaysand highways

Don't know67%

30%

3% We should focus on …

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OutlineOutline

•• Population and economy forecastsPopulation and economy forecasts

•• Funding and meeting needsFunding and meeting needs–– Education facilitiesEducation facilities–– TransportationTransportation

•• Governance challengesGovernance challenges

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A great dealOnly someVery littleNone at allDon’t know

Lack of confidence in government is a Lack of confidence in government is a source of resistance to planningsource of resistance to planning

Local government State government

47%

15%

28%

8%2%

31%

9%

46%

12%2%

How much confidence do you have in your local / state government’sability to plan for the growth and future in your region / the state?

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There are strong partisan differencesThere are strong partisan differenceson spending for infrastructureon spending for infrastructure

49

60

42

52

43

35

50

42

0

10

20

30

40

50

60

70

All Adults Democrats Republicans Independents

(%)

Higher taxes, more spendingLower taxes, less spending

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Regional planning seen as the answer, Regional planning seen as the answer, but with local voters in chargebut with local voters in charge

Should local governments work together and have a common regional

plan or each have its own plan?

3%

20%

77%

Common regional planEach its own local planDon't know

Who should make the important decisions?

4%

23%

73%

Local votersLocal elected officialsDon't know

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Whites will still be majorityWhites will still be majorityof voters in 2020of voters in 2020

108

19

63

0

10

20

30

40

50

60

70

Projected 2020 voters

AsianAfrican American

LatinoWhite

(%)

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Some issue areas to address Some issue areas to address for future planningfor future planning

•• The education deficitThe education deficit

•• The threat of unrepresentative governmentThe threat of unrepresentative government

•• The inequity of infrastructureThe inequity of infrastructure

•• The shrinking infrastructure dollarThe shrinking infrastructure dollar

•• The difficult policy contextThe difficult policy context