Investing in California's Future

California's Economic Context

• California currently ranks as the world's 5th or 6th largest economy (comparable in size to France), yet holds the highest effective poverty rate in the U.S., comparable to Romania.
• The state's average productivity per capita is approximately double that of France and England due to a population roughly half the size of those nations.
• Without intervention, projections indicate a shortfall of 1.5 million college graduates and 1 million skilled workers by 2025.
• Current K-12 graduation rates stand at 77% statewide, though the rate for African-American and Latino students remains at 70%, with only 13% of that demographic proceeding to four-year colleges.

Education Initiatives and Outcomes

• The Partnership for Los Angeles Schools (PLAS) operates as a public-private partnership targeting systemic change rather than symptom management.
• PLAS currently manages a network of 18 schools, investing an additional $675 per student annually on top of state funding.
• Total philanthropic commitment by the Milken Family Foundation to PLAS reached $200 million over the last decade, with a new pledge announced for the following year.
• School Performance Metrics:
  • Graduation rates in the 18 partnership schools rose from 36% to 81% (projected to exceed 84%).
  • Statewide graduation rates increased from 44% under Mayor Villaraigosa's early tenure to 72% upon his departure.
  • Schools failing improved from one in three to one in ten during the same period.
  • Schools scoring 800+ on standardized metrics grew from 89 to 260.
• Mayor Villaraigosa and philanthropist Melanie Milken advocate for a "fierce urgency" starting with early childhood education, citing it as the highest return on investment for vocabulary development.
• Steve Westly identifies the primary barrier to state success as the "broken" K-12 foundation, noting that high school graduates often lack preparation for future workforce needs.

Infrastructure and Future Technology

• California's historical growth model involved spending 25% on infrastructure and 3-5% on social services; today, this has inverted to over 20% on social services and roughly 4% on infrastructure.
• The panel calls for redefining infrastructure to include autonomous vehicles, universal broadband, and high-speed transit systems like Hyperloop.
• Renewable Energy Trends:
  • Solar energy costs have dropped dramatically, now cheaper than most carbon fuels, driving a market shift despite federal policy opposition.
  • Power storage costs have fallen from $2,000/kW to approximately $200/kW, enabling the economic viability of all-electric vehicle fleets.
  • China is currently constructing solar capacity equivalent to a football field every hour, driven by environmental mandates and economic necessity.
• California holds a competitive advantage in the green economy, being home to half of the U.S.'s top bioscience universities and serving as a global hub for clean tech and biotech.

Demographics and International Relations

• California's population is increasingly diverse; 67% of Los Angeles residents are from Asia, Africa, or Latin America, and 75% of children under age five fall into these categories.
• The state hosts the largest populations of Koreans, Filipinos, Thais, and Persians outside their respective countries of origin.
• East West Bank positions California as a strategic bridge to Asia, citing that 25% of all Asian ancestry in the U.S. resides in California.
• Chinese tourists spend an average of $7,000 per person in the U.S., double the amount spent by European tourists, significantly impacting California's service-based trade balance.
• Steve Westly notes that 50% of companies going public on NASDAQ are led by immigrants, labeling immigration policy restrictions as a threat to California's economic engine.
• A 2017 survey indicates 41% of China's leading entrepreneurs prefer living in the United States.

Healthcare, Nutrition, and Food Systems

• Chronic diseases cost the U.S. $3 trillion annually, with obesity accounting for 41% of these costs.
• School Nutrition Reform:
  • LAUSD implemented "Breakfast in the Classroom" to prevent missed meals and recover $40 million in unreimbursed federal funds.
  • The "Peer Health Exchange" and "Communities in Schools" are utilized to address dental and general health issues that hinder learning.
• Precision Nutrition and Business:
  • Nestle appointed a CEO from healthcare to pivot toward a "healthy company" model, recently selling its chocolate division.
  • The venture firm Wesley Group invested in Revolution Foods, which now serves over 2,000 schools in 26 states by providing healthy meals at approximately $3 per student.
• Mayor Villaraigosa advocates for health care as a right, suggesting a "public option" to lower costs while expressing skepticism regarding the immediate feasibility of a single-payer system due to the $400 billion price tag and integration complexities.
• Housing and Employment:
  • Housing unaffordability is identified as the primary driver of California's high effective poverty rate.
  • The state faces a deficit of 3.5 million housing units, with 1.2 million reliant on transit-oriented development.
  • Steve Westly warns that autonomous vehicles will eliminate 4.7 million driver jobs (taxi, trucking) faster than anticipated.
  • The panel recommends "cap-and-trade" mechanisms for housing: cities that fail to build affordable units would be required to fund regional housing projects.

Policy Recommendations and "Lightning Round" Consensus

• Public-Private Partnerships: All panelists agree that private capital and expertise must fill gaps in public infrastructure, education, and social services, particularly given California's low per-pupil funding (ranked 41st nationally).
• Curriculum Reform: The state must shift K-12 education toward app design, coding, and robotics to ensure future workforce readiness, starting before high school.
• Immigration and Democracy: Steve Westly suggests California should lead the nation in electoral reforms, such as open primaries and independent redistricting, to improve federal governance.
• Teacher Retention: Melanie Milken highlights the critical need to address the teacher shortage by linking free college tuition to teaching service and providing housing subsidies.
• Mayor Villaraigosa's Priority: If granted a "magic wand," he would ensure every child in California has access to the same quality of education and opportunity as affluent peers, starting with universal preschool.