Assembly Budget Subcommittee No. 5 on State Administration, Tuesday, April 21, 2026
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Assembly Budget Subcommittee No. 5 on State Administration California State Assembly
Ihren Sitzungen folgenRedner 2
And then the light blue is bet. Those are potential game changers. We don't know which of these are gonna hit. There are things like quantum infusion that are really important. And then the orange block at the bottom, we call those the anchor sectors.
Those are critical sectors that are that are absolutely indispensable to continued growth. As you can see, child care, health care, housing, broadband. So, obviously, we wanna keep an eye on all those as we, also focus on developing jobs and some and and they're also big job creators as we know. So, that is the kind of the overview of the state economic blueprint. So as we continue to implement the recommendations and tactics in the blueprint, we further kinda wanted to focus this work.
So we identified four pilot sectors as a starting place. This is where we're gonna start as a statewide strategy to to to really focus our efforts. Those are, again, the strat the sectors we think on a statewide basis are most likely to produce results by investment and focus. And those are ag tech and farm equipment, space, defense, and satellites, life sciences, and then semiconductors and microelectronics. And those were again, we each of the sec each of the 13 regions identified priority sectors.
We rolled those up into about 10, and then we chose these four to start. And we're now in the process of running working groups in conjunction with our jobs first council, which is the governor asked that all the agencies across government well, actually, nine cabinet level agencies across government participate in this because job growth doesn't just come from GOBIS. It comes from places like CDFA and AG and other places in the government. So they've all been enthusiastic participants in this in this process. But, anyway, we're working these working groups, we are talking to across government but also to the private sector to understand what are their priorities, where are the roadblocks, and what can we do to help unstick things when they get stuck.
And one of our other goals is to make sure that we're aligning not just the programs within the jobs first, but all of our programs, incentives, other things, whether it's Cal competes or workforce training programs at the labor agency to make sure that we're again, we're coming at this with a focus, and we're investing our resources in accordance. So through that process, we we did $1,600,000,000 in state investments in that jobs first framework in 2025, and that went to train more than a 142,000 workers and help create more than 61,000 new jobs across California. That was 2025. So there's a lot more we can do, and we're excited to keep focusing on that work. So that's an overview of jobs first.
We're also excited to and looking forward to continuing to support economic development and job creation in California by by focusing by by with our California brand campaign. That was supported thank thank you for SB one zero five and AB one zero seven, which approved that $20,000,000 for us to go out and make sure we're telling California's story. We know that our state's long been a place where bold ideas become global industries and diverse communities feel economic opportunity. But we're at a time of intense national and international competition, and it is essential that we proactively communicate the facts about California, our economic leadership, our entrepreneurial ecosystem, and our extraordinary quality of life. And so we think this is a chance to tell the real California story.
We've seen other states take that approach, namely Michigan and Pennsylvania. There have been others. But the point of the campaign is to bolster business attraction and retention, which is our, again, our primary mission. And we wanna do that across California to encourage more of what's made us so great, the researchers, the inventors, the investors, the entrepreneurs, the people who come here, invest, and create jobs. We're still in the midst of the state procurement process to select an external campaign partner, but we plan to leverage this brand campaign to grow the key sectors that we're focused on as well as the rest of our business environment across the state.
Again, with jobs versus the focus, I wanna talk a a little bit about some of the other programs that are before you. You know, the there are our budget requests are across a number of program areas, but, again, they're all aligned with our jobs first mission to invest in strategic sectors that will drive economic growth and create jobs. So for example, our international affairs and trade team's budget request for cow export enables our department to continue to provide dedicated support for small business export promotion activities. This allows businesses to successfully enter international markets, where they find new opportunities to grow, invest, and hire. And we know that companies that engage internationally just have better return on investment.
Since 2022, the department has helped nearly 400 businesses generate over a $142,000,000 in export sales with over 650 jobs created and retained. So we also think that this proposal will help with supply chain resiliency at a time when that's incredibly important, very turbulent global economic environment, and we've seen California share of export decrease a little bit. So focused on that. We're also asking for three permanent staff to the California Film Commission to help manage the film and television tax credit program. As you all know, we thanks to you, we were able to make big increase in that program, and it has a real impact on our state's leadership in the creative economy.
It's generated more than $1,900,000,000 in activity since 2019, and that's almost all before program four point o and the expansion. And we really think it's essential to expand and improve the program to keep the family supporting below the line jobs here in our state at, again, a time of tremendous competition around the world. Lastly, we are supporting our innovation and emerging technologies team to create much needed capacity for our office to really thoughtfully engage with companies in the bet sector of the blueprint. We wanna ensure that emerging technologies like quantum and fusion are when they're commercialized, and they will be, that we continue to lead, that California continues to play a leadership role in those places. So through the jobs first lens, the Go Biz budget request will drive meaningful and long lasting creation within every region of the state.
And, again, our big effort is to try to align the work that we're doing so everybody's pulling in the same direction. Wanna talk a minute about the California Civic Media Fund. So we've been working on that. We come to the table recognizing the state's newsrooms are small businesses and large businesses and nonprofits, and that they provide invaluable services to the communities that they serve. Since we took stewardship of this program few months ago, we've made real progress.
We've named members to the advisory board. We've held two board meetings, which were open to the public and publicly noticed. And we secured the James b McClatchy Foundation as our third party administrator to make sure that we have the expertise and the independence to appropriately administer the program. In the meantime, our team is working with board members, stakeholders, and the public to design a grant program that prioritizes a California based new news organization that meets baseline program standards and that equitably serves newsrooms around the state. So we're looking forward to our next advisory board meeting, will be sometime in May.
Still trying to schedule that where we can continue to share more details about the specific structure of the program. So, ultimately, whether we're talking about supporting good paying jobs in journalism or the strategic sectors outlined by our jobs first blueprint, just really excited about what's ahead for GOBiz and and the work that we can do across state government to make sure that we continue to really drive an economy that will support all of our people and be equitably and regionally distributed. So with that, chair Quirksilva, thank you for giving me the time to to present to you all today and look forward to any questions that you might have.
Redner 1
Thank you. Appreciate that overview. And I think we will go to our LAO next, if you have any comments.
Redner 7
No comments? Alright. Jesse Romine, department of finance. No further comment, but available for questions.
Redner 1
Alright. Do we have the department of finance here? That's gonna be next. Alright. We'll have you comment on each let's go to our members.
Do we have any questions or comments?
Redner 5
Thank you, secretary, for coming to cover the department here today. Only a couple of questions. I wanted to pick up where you left off on journalism support, a key issue that I'm working on, not just through the subcommittee, but a couple of policy areas as well too. And I think in light of that, I'm wondering about if you can expand on the the what what I'm calling the Google update, how it's moving under your department. The last year, I believe, the budget, the California Civic Media Program had authorized $10,000,000 to be administered your program.
And then I've heard, you know, a little bit of news secondhand about the guarantee, I guess, of of resources that that might be there to be able to facilitate the journalism support that we intended through that program. Can you give me a a broader overview of of how things are going?
Redner 2
Yeah. So I think we're making, you know, steady progress. We feel good about where we are. We sort of came into this after it was the governor signed the legislation in in October. And so what we've tried to do and and and there were some things that were obviously legislated, including the makeup of the advisory council, the the the board in effect.
So the, you know, the the goal has been to sort of make sure that we get input from stakeholders advisory board members, but also from stakeholders around the community, which we spent several months doing. There have been a lot of conversation about what this program should look like before it ended up in this in the kind of iteration that it is. So and that we we want it's it's gonna be a grant program, basically. We're working with the James b McClatchy Foundation. As I noticed, they're our third party administrator on the state fund side.
There's another $10,000,000 on the Google side. They've hired a different third party administrator, but we're obviously gonna work very closely together. And the goal is to set up a structure for that program that will provide resources to news organizations around the state. We're trying to, you know, make sure that it's equitably distributed. We're looking at kind of a hybrid model that will blend some grants directly based on headcount and some that are based on on some other factors that will make sure that the money is equitably distributed to news deserts, to underserved communities, things like that.
We're gonna put a cap somewhere probably around $250,000 for any single news organization, but there will also be a floor that anybody with this with any organization that qualifies, and there'll be numerous criteria for qualification, will get at least $20,000. Right? So and this is the first time through. So our hope is to stand this up as a bit of a pilot program and to take our learnings and hopefully apply that to subsequent years if there's funding. So that's where we are.
So the next board meeting sometime in May will lay out, again, based on feedback from many stakeholders, kind of our summary of what we think that structure should look like, get the feedback, fine tune it, and then we'll start we'll issue the RFP for people to apply. And one of the reasons we really like the McClatchy Foundation was that they're really good at technical assistance and read they have a good network to be able to reach out and make sure news organizations know this is an opportunity for them to apply for these funds. So we'll do the the window for applications will open in the summer, and we hope to have the funds out the door by early fall.
Redner 5
Okay. That sounds good. I think you probably know and and deeply appreciate the very immediate stress that a lot of our local media, our nonprofit public media partners are under. Some stations, particularly in rural communities in our state, are closing altogether right now. And so Yeah.
There is a sense of urgency right now. And so to any extent that the work the the outcomes and the the activity of the working group can be accelerated, you know, I think it's timely. I'm wondering too, and I'm trying to align here with your with our state's economic blueprint, also the chair of our arts entertainment sports and tourism committee. And I know probably at a later date, we'll talk about the California Arts Council and sort of, our perspectives on the the grants that we would like to see as well too. But, you know, I think, rightfully, we have them in a strengthened kind of bucket here.
Redner 5
Yet the governor's January draft budget seems to have very consistent and historically modest levels of funding right now for the arts and the creative economy sector. So how well do you see these sort of different areas that and I I appreciate our budget is finite, and we have some challenges overall that we're having to sort of balance. But for areas that we wanna be able to strengthen, wouldn't I as, expect on the outset that we would see a strengthening in in in in proposed budget?
Redner 2
Yeah. I mean, the only programs the programs that we have are the programs that we have, right, is GoBiz. So I think you guys are familiar with most of those. They're CalCompetes. There are some other programs that we don't control directly like CATFA, the sales and use tax credits for equipment, and then our employment training panel to provide support for companies that wanna train workforce.
You know, we don't have a lot of other financial tools that we can offer for for companies in any sector. Although, we have gotten some. We got some money for quantum from you all to $4,000,000 that we're gonna invest in quantum and some for fusion as well, which we're very excited about. It's not, you know, it's not a it's not an astronomical amount of money, but it's enough for us to really start to invest and kinda build the ecosystem with our partners in those sectors. The other things that we that we do is we try to help with you know, for organizations that need grant funding, that's that's not something that we control.
Sure.
Redner 5
Not not directly, but as a mechanism of sort of state, economic and development. Yeah. Right? Is there any relationship? Do you have any crosstalk with other organizing?
I know that's a responsibility of the California Arts Council. Yeah. But if you have the overall blueprint that we're trying to see for some total total impact of economic development in the state, what is your sort of relationship with various departments to really align how we are prioritizing whether we're gonna accelerate this growth or we're gonna maintain base level anchor sectors? Yeah.
Redner 2
We worked closely with the Arts Council on the development of their, you know, their sort of economic strategy for creative industries, right, which I think you all funded, and they put that together over the course of the year. So we did try to help them with that to try to identify opportunities. Again, we we don't have any supplemental funds, but we absolutely work with them. And there were some funds available through the OSBA for arts that would have you know, sort of post pandemic support for venues and then for keeping workforce on. So that's over the last four or five, six years.
Those programs, I think, have been very helpful to some of the to our to our creative arts communities. There but but we would we would help them, try to identify opportunities for training through the OSBA. Can we provide resources? Because we do have technical assistance through partially through the federally funded and state supervised the small business development centers and some of those kinds of resources that exist in the community. So trying to where we don't have direct funds for grants, how can we help them solve other problems?
Are they do they have permitting or regulatory problems? Do they have access problems? Can we help them work with their local communities to provide support? Sometimes, can we connect them with potential philanthropic funders? So we do that across a number of different sectors.
I mean, each sector obviously has different sets of needs depending on how they operate and where where they kinda fit in the life cycle and what their challenges are. But we absolutely recognize arts, whether it's the film and television business, which obviously got a Sure. Big that that's a much more specific program, or community theaters or, I mean, visual arts that exist in these communities. We know that that's a driver of economic opportunity in California, and it's just important to our culture.
Redner 2
I mean, one of the things that underpins our culture is this kind of belief in creativity
Redner 2
And thinking about new ways to solve problems. And I think all that fits together in a really important way, so we try to be as supportive as as we can.
Redner 23
That's great to hear, and I agree exactly with your sentiments and statements. And I am hoping that, like, know, we are connecting those dots, you know, across agencies that ultimately are getting this impact as fast as possible out to community out to communities because they are they are struggling. If we say that they're a, strengthening sector that we wanna be able to support and we know they need that support desperately Right. You know, wanna make sure everything is aligned. Another kind of, you know, very macro question is how I'm kinda curious, your perspectives on, AI coming into the workplace, as we're thinking about a lot of our programs that are meant to incentivize economic development.
Redner 5
Yeah. How much are we, testing against, you know, investments that otherwise are gonna be jobs lost in maybe not this year. I know you do as we operate on a reimbursement basis that you demonstrate those jobs are actually created, but Right. Are we aligning in a sort of, you know, the the risk either by industry or by actual company or recipient that one that that, you know, our state investments are gonna be short lived Yeah. And eventually replaced by automated technologies.
What what what is your kinda internal conversations on AI and how that aligns with, I guess, you know, the decision making that we're we're thinking about these investments?
Redner 2
Yeah. It's it's a really good question, and it is a it's a it's a meta question. You're you're Yep. You know, you're not you're not wrong about that for sure. And it is something that is a focus not just of GOVIS, but the governor and the entire administration.
I think you all have seen him and the administration engage in a lot of different ways, whether it's identifying procurement opportunities for AI to help us make state government more efficient or whether it's working with you to decide on what kind of guardrails do we need to make sure that people are protected while without, you know, impacting the opportunity that that that AI presents. So I think it's something that that, again, agencies, departments across the administration are engaging in on a daily basis. At GoBiz, we work kind of on on a you know, we will obviously work across the administration. We also try to help. One of the things that we focused on is how big businesses are obviously talking about this every day.
Maybe they have more resources. We're obviously very interested in what their needs are, whether it's data centers. Right? This is something that we at GoBiz deal with every day. What, you know, what are the data needs?
What what where are there opportunities in the state? How do we wanna approach that? Right? Communities, some aren't interested in data centers, some are. There's obviously energy requirements.
There's some communities are ready for it, so how can we help them move through that process? And this obviously involves many state agencies and departments. In within small within GoViz, one of the things we try to focus on is there's a lot of small businesses who maybe don't have the resources to understand you know, to really sort of drive forward on how can they use AI to to help improve their businesses, whatever that is. So we're we've set up a series of webinars, seminars, some in person, some virtual with small businesses and sometimes with Google or other partners to help them understand where are their opportunities. Right?
How can they use AI tools to further their business interests? And so from the kind of meta level of the of the, you know, the big companies that we deal with every day to the micro more micro level where how do we make sure our small businesses succeed. We've also worked with, again, our partners in the business sector, Nvidia, Google, and others to try to create curriculum. Right? We're in the process of to make to to how do we train the workforce more broadly, not just the small business, but the workforce more broadly to be ready for jobs in this sector?
It's because it's gonna impact what what doesn't matter if you're in health care, you're in, you know, aerospace. Everybody is gonna need to be familiar with AI. So working with our private sector partners, the governor signed an EO, an executive order on this last year, to really start to stand that up working with community college and eventually with CSU and the UCs to make sure that there is, curriculum that we can, you know, scale that faster and get as many people who are interested in. And then what what are the and and always with an eye on what are the business sector needs. Right?
What are what are people businesses telling us they need in terms of we know that they can take care of the PhD part themselves, but in terms of tech technical workforce. And so that's an ongoing process, and I think that's something that, you know, we'll be engaged in for, you know, a long time.
Redner 5
Yeah. I appreciate that. And and probably a growing, you know, urgency for, I think, more of our top minds to be paying attention to that. Yeah. And I think that what I'm gonna be looking for closely over the next, you know, year to two, is to make sure that, yes, where AI is a helpful tool, to be able to help more effectively, efficiently, perform job functions, to be able to have increased productivity, to be able to also, like, you know, enhance that workers', work experience.
Yeah. You know, that that that that's a synergistic thing. Right? Win win right there. It also helps California compete a little bit better because maybe we are producing at a better clip, and you'd wanna be able to locate here because we're actually trying to think about this positive interaction and relationship.
What I'm nervous about when I wanna watch for is to make sure that state investments aren't going to opportunities that are or or aren't going to companies that are able to use those incentives, investments, tax credits, whatever they are across the board within your house or outside elsewhere through some other program that's gonna turn around and replace these jobs. Yeah. Right? And then we have, like, a harm to Californians as well. Meanwhile, that corporation, that business is running away with something, you know, very lucrative on our dime.
I can think about, you know Yeah. A certain multibillionaire that did that to us more than a decade ago right now, you know, built that company, became very rich, you know, and then turned around and gave the middle finger to California for, you know, their own political reasons.
Redner 5
I know. And I correct that record anytime this kinda comes up. But, nevertheless Yeah. You know, it's the attitude out there that somehow our investments, you know, while he didn't take any of those jobs, by the way, I should say, there are a lot of other concerns that we have about, you know, workplace issues there at that that company. So we'll just leave it at that, but I think things are gonna take active study to to make sure that, you know, we're not letting go certain principles that we hold very closely with respect to our workers.
Redner 2
Yeah. And I will just in response, say a couple things. One, a 100 on we don't wanna fund companies that then take jobs away. Calcompetes is very strict. You have to commit to a certain creating a certain number of high quality jobs, then you you are, you know, held accountable for that.
So Right. We need to make sure our incentives have that ability. But I hear, and I'm sure you do, in, you know, your part of the world, that workforce is one of the primary concerns of growing industries and sectors. But they do think California has a great workforce. So how and that's one of the things that keeps people here and attracts people companies here.
Right. So we need to keep our eye on that ball, in fact, and sell accelerate our efforts to make sure we have a trained, a highly skilled workforce, across evolving technologies, and that we're ready for the jobs of the future. Thank you.
Redner 6
Thank you, chair. Hi, miss Myers. So great to see you. First, thanks so much, for your team's work on the films tack film tax credit. What a huge win for California last year, excited to see, the work that your team and the film commission is doing on that.
I wanted to ask kind of three main questions. One of the questions that I had, and I'm sorry if you mentioned this in your earlier presentation that I missed, was really how Gopiz and your team is really encouraging foreign direct investment. That's something that has come up a number of times, including on a select committee, that I chair on Asia, California trade and investment. I know that in California, and it might be specific to Los Angeles County, that the the largest country that has the highest number of direct investment is Japan, for instance. And I just would love to hear your thoughts on some of the things that GoBiz is doing.
Redner 2
Yeah. Thank you for that question. I did address it a little bit in my remarks, but I'm happy to say a bit more. Foreign direct we are one of the primary states for foreign direct investment. And as you know, Japan and The UK are our two top.
They go sort of back and forth, which is the number one source of foreign direct investment. And we do try to we have the international affairs and trade group sit within GOBIS, and we work very closely with our businesses to help them be able to take advantage of those opportunities. So one of the things I talked about, we've asked for additional funding for cal export, which is a program that lets our department provide provide export promotion and support services for small businesses, allowing them to enter these international markets, which, again, provide additional opportunity. And, again, the the peep companies that can engage internationally have, better return on investment. Since 2022, our international affairs and trade team has worked with nearly 400 businesses to generate 142,000,000 in export sales, and that's helped create and retain more than 650 jobs.
So that's something we're looking to fund in the in the in this year's budget. But we meantime, we we do all kinds of other work across with with our companies. We take trade missions around the world to places like Farnborough, which is a big international air show in The UK, or we took a a a delegation to Ukraine last year. I mean, well, to to Poland for a rebuild Ukraine conference, and then they actually did go to Ukraine. And we're looking on expanding that.
That's both something I think that's a value that we share, but also an economic opportunity where our California businesses can help provide the rebuilding expertise and and resources that will be necessary once that war has resolved. So Emily Desai, who will be coming next, also can answer additional questions if you have more specific details, but we help with both supporting import and export opportunities for for small businesses, welcoming that foreign direct investment, that job creation, that, you know, techno and information sharing, and then supporting, again, export by making connections between our businesses and sectors and other businesses around the world. And we've had, I think, a lot of success with that, and we'd like to continue to grow those programs.
Redner 6
Thank you so much, and look forward to chatting with your team after this. The second item I wanted to ask you about was really around our small businesses. And I know you talked about some of the industries and that we're seeing a lot of growth in California. Curious if there's any other industries that you see really driving growth in the next five to ten years. And then consequently, what do you see?
How do you see GoBiz's role and also ensuring that as California grows these industries, that that also trickles down to our small businesses Mhmm. Who are on the front lines of of our local economy and driving that growth at the local level.
Redner 2
Yeah. So one sector that we are just as an example is commercial space. And we had the opportunity to go to the space symposium in Colorado last week where there were a lot of California companies there. And it's a very exciting industry. One of the things I mean, these are both startup companies as well as our our aerospace primes like Lockheed Martin, which played a huge role in Artemis two.
They built the orbiter. Right? That that that that the capsule that the Orion capsule that housed the astronauts. They said we said when Orion happened, the governor put out a press release that said, we think 500 California businesses participated and 16,000 Californians worked on some capacity. And Lockheed Martin said, no.
No. We had seven at least 750 businesses just supporting the Orion in the Lockheed Martin supply chain around the the the building of the capsule. So that's just a great example of big companies and small companies benefiting from the incredible kind of energy and dynamism around this one sector. And we're seeing all kinds of investment. These, you know, start up companies, whether it's Angirol or k two or some of these very new companies that are growing fast doing 5 and $750,000,000 investment rounds, which is and and and committing to hiring in Southern California thousands of workers.
And so, you know, our role in that is, you know, how do we help them, again, navigate when permitting issues if that's what they need, cite their their their companies. But more than anything we heard, we want more we we we need more investment of workforce because there's a lot of competition in place like Long Beach for not just engineers, but technicians. And we were told LA is the or LA County is the best place in the world for technicians because there's a long history of workers there supporting the aerospace industry, which is now, you know, part of the new commercial space industry. So that is certainly something that we took away from that gathering in Colorado. But also, as I said to Assemblyman Ward, that's what we hear all the time is how can we invest in workforce.
So we work really closely, and I I think I neglected to really underscore that. In the California jobs first process, it is a partnership, a very close partnership between GOBIS and the labor and workforce development agency. Labor secretary Stuart Knox and I are attached at the hip on this work because you can't have one without the other. And we need to continue to maintain our advantage in workforce whether it's, you know, the our great universities that turn out two, four, six, eight year degrees as well as the technicians, and how do we make sure that we're providing the training opportunities for people who can get you don't need a four year degree to have a good family supporting career track job in many of these industries. So that's just one example in our home of LA County.
Redner 6
Thank you so much, miss Myers. And the last item, I guess, is more of just a comment, but would love to continue working partnering with GOBiz. Your team has a wealth of knowledge and expertise in so many different areas from film to climate, small businesses, and you really see, like, big picture, you know, what is happening in different industries and and also at the the micro level, you know, where folks are struggling and you're hearing from that, we'd love to continue to engage and maybe do a workshop on some of the work that you're doing to make sure that, some of the initiatives that you guys are driving and investing in, also make it to the to the local level and the districts that we represent.
Redner 2
Yeah. We would be delighted to continue to work with you, provide whatever, you know, information we can, and we're always welcome and open to whatever ideas you guys have about what what else we could do or what we could do better. So appreciate it.
Redner 1
Thank you. And there you have it, a legislator that has another ten years here and someone who's leaving very shortly. But certainly A few of us are leaving shortly. Certainly appreciate this blueprint. You may not know, but I was an elementary school teacher.
So when I see little things like this, it makes me very happy. And we know that that the big lift last year, of course, in the budget cycle was the film tax credit. We do have it on here to speak more. But if you can just give me a few thoughts related to the film tax credit. And then secondly, right under that is manufacturing.
And I'll just give you the context of the the the question under manufacturing. Yesterday on the state of assembly floor, which I'm assuming that you don't watch every moment of the state assembly floor, but it was brought up related to tariffs and how this is impacting not only California, but the rest of the country. And there was a lot of dialogue back and forth, but it was talked about, well, the entire point of tariffs is to kind of level set, get other governments to may pay more of their fair share, but also to bring back manufacturing. So if you can speak to that because, I'm I'm wanting to know if there is any reality to these remarks that we are actually really bringing back manufacturing, in the sense related to tariffs and how that goes. So those two questions.
Redner 2
Okay. And then I have one more after that. Okay. With respect to the film tax credit, we're very grateful, for your support and the response we've seen to the expanded not we didn't just increase the budget from $330,000,000 to 750. We made really important changes.
We increased the aggregate value of the credit. We brought in a couple of sectors that animation and large format shows that had not been eligible, and we made some other changes to the program to make it more competitive. And as a result, we've seen a big increase in applications, and we've seen it we've brought back some of the big projects that we hadn't seen in a while. So that's all very exciting. And we've also seen a a really healthy you know, it's sort of disbursement of some of the jobs.
I mean, some of the non outside of the 30 mile zone. Right? We're seeing film activity, a lot of shooting days outside of LA, which I think is great for the state and for the members who supported it to see that the benefits are widely shared across the state. There are challenges that are that are bigger than California in this industry, as you all know. There's a lot of competition from around the world, and we're seeing not just California and Los Angeles losing jobs.
We're seeing Georgia, and we're seeing New York losing jobs to to other places in the world because they can do it more cheaply or because they cover health care, quite frankly. But we are not giving up. We're gonna continue to fight for our jobs. We know we have the best crews, the best locations, best stages of any place in the world, and we hear that all the time. People are very grateful to be able to come back and shoot.
You will hear more from Liam Adrano who runs that program about about all the work that they've done to make sure that the program is as competitive as possible and some of the results that we've seen which are encouraging. And we we continue, and I think people think, like, all the production jobs have left California. We are we are it's definitely a challenge, and I don't mean to underscore, but we have more production jobs in California than New Jersey, New York, and Georgia combined. And we're gonna keep it that way. We're gonna watch and hopefully see an even an increase in this in the share of jobs that we that that are here.
So and we'll continue to look for other ways to improve the program. There's been a lot of talk in the in the governor's campaign about, you know, doing even more. So we'll see what happens. But Leah can talk more about the day to day operation of that program and why they need additional support. The second question, manufacturing.
Tariffs are a tax on people who purchase goods in California and every place else in the country, full stop. Some some companies can eat some of those costs for a while, but, ultimately, those costs get packed passed on to the consumer, and we've seen that. We've also seen that's why we've seen a sort of a dip in California's share of exports. We are hard hit by tariffs for a lot of reasons, particularly we have between Oakland and LA and Long Beach. Obviously, we have a huge import export supply chain node and across the supply chain.
So we have we have felt it, and we've tried to support our businesses with, you know, some seminars and stuff about what they can do, but there's there's not that much we can do, particularly because it isn't a consistent set of rules that everybody can then just build around and plan against. And so that has been challenging. But to the other part of your question, what what what will bring back manufacturing jobs? California already has more manufacturing jobs than any state in the country. Right?
We have a huge 1,200,000 manufacturing jobs in California. We'd like to have more. We've lost some. We haven't nearly lost them all, but we but we need to do more to keep those jobs here. And I think what we, you know, what we've seen things that are helpful from our perspective are the incentives that allow us to help to attract.
So that's something everything from a Cal competes, you know, to the to to credits like case sales and use tax credits on manufacturing equipment, sales and use tax credit on other equipment, you know, the ETP, the employment training program, which helps train workforce, which, again, is a consistent theme that we hear. We also need to make it easier for people to build in some ways. And we've you know, while while obviously being true to protecting our environment and the communities where these where these facilities might be built. But we as you know, we've we've you know, how can we make it how how can we go quicker on things like CEQUA in some cases? It's not even businesses a lot of them don't they they don't really complain about what they have to do.
They complain about how long it takes to do it. I mean, they do complain a little bit about what they have to do as well. But it's really like, if they could do it in, you know, some instances, two hundred and seventy days, if we could shorten the time frame for for getting, you know, through the decision making, the EIR, the legal process, that would be a huge help because the time cost of money, they can do it much more quickly in other places. But there's a lot of reasons that they wanna be here. 40,000,000 consumers, access to, you know, export and import opportunities, supply chains, workforce.
So we need to continue to build our workforce and make it easier for companies that wanna make things here to do that. And we could I mean, our GoBiz team could talk for hours about, you know, sort of how we how we might think about that, and I'm happy to say more. But we think there's a big opportunity for it. And, you know, having a CEQA exemption for advanced manufacturing on pre site know, on on land that's already zoned industrial is one. I know that's something that you guys continue to talk about, but that is something that is met with with a lot of enthusiasm on the business side.
So we're interested in all of that. I
Redner 1
was just asking, did we how did that piece of legislation move last year? So Yeah. I was thinking it's and and We're still talking You're about talking about related to manufacturing intersects with our very robust housing discussions, which just the word streamlining, we just still seem to have many, many obstacles. Yeah. And those can add a year to three years onto these projects, which can be costly and sometimes we know that we can lose business because of that.
Right. Alright. My final question, because I know we have the four panels related to specifics. On the Jobs First program, if you think about the state of California as a whole, can you give us some ideas of areas that have done exceptionally well with the program and areas that you're still seeing that maybe need either additional support or they just haven't responded in the same way? Regions, I would say.
Redner 2
Yeah. You know, not to single out any favorite child among my 13. The one that has done really well is the Central Coast. Right? And they, again, in this kind of space theme that and I think one of the things that helped was some of the regions just had previously established kind of economic development infrastructure.
Right? They just had more. And in some of the smaller, more rural areas, there just there wasn't necessarily as many resources historically. So but on the Central Coast, there's an organization called REACH. That's a it's an economic development, you know, not you know, basically, economic developer.
And we've worked with them over many years, and they have come into the Jobs First program as the convener. And they have done a really great job working with that community. And so we were able to fund the $9,500,000 space Dandenburg project through the regional investment initiative as part of this. That really helps them start to build the infrastructure and do the workforce training to to accelerate the space you know, commercial space sector on the Central Coast, and that's the five county region from Ventura County up to San Luis Obispo, Monterey. Is there one more county in there?
San Cruz.
Redner 1
Exactly. Dad used to live, and they have a hidden gem up there called Halama Beach. If you haven't been there, it's Yeah. Some people are shaking their head.
Redner 2
It's it's amazing. It's a very popular beach. But, obviously, with Vandenberg there as the anchor, as the as the, you know, the launch site in California for for that kind of vertical launch, you know, that there's a huge opportunity there. And so that region has responded with a really dynamic plan with a really dynamic application for for this investment, which they received. And so they're, you know, hard at work trying to make sure that we take advantage of that opportunity.
Some of the small so when we when we started it, we gave each region $5,000,000 to build a plan, to make sure that each one had the capacity. Right? And, you know, some of the bigger regions didn't like that. They said, why this should be on a per capita basis. And we said, no.
We want every region just start some of these smaller regions need more resources. They have you know, there's just they haven't had historically that kind of support. And so that was that was successful. And it you know, some regions took longer than others to get their regional planning to meeting, you know, their their sort of, collaboratives together, and to build the plans. But we worked very closely.
Our team did a great job of really providing technical assistance and partnership to make sure that each region produced a really solid plan. And I think we were it was hard. You can imagine in, you know, getting people to work together who haven't traditionally done it is is hard work. I think we all learned a lot. But at the end of the day, think each of the regions came up with plans.
I think, you know, again, some of the regions with fewer resources like our North State, right, which is the eastern half of the state up to the Oregon border border, they're just it's just that that's just a region that's been economically more challenged for a long time. But they have made a lot of prod progress, and we're gonna continue to work with them while they implement their plan and make sure that they don't get left behind. And one of the things we wanna do is really hopefully find a way to work with the incoming administration, right, to to just provide them with just the resources that we've built, and hopefully, they'll take and make it their own, but that there will be continued investment both, you know, in human time and in whatever resources to keep this work going because I think the potential continues to be really substantial.
Redner 1
Thank you. I appreciate that. If you and I know I think I believe I saw it last year and it might be in here this year. But if we could get a a a map of the regions. And because I'm not sure.
And and one suggestion, if you don't mind Sure. Is, you know, people get elected as you see new classes every year and we assume everybody has the same starting base. So, you know, everybody knows something about small business, everybody knows something about go biz, everybody knows something about all the state administration. But the truth is that's not the truth. Everybody has a different lens.
Maybe they're very focused on education. Maybe they're very focused on veterans. Having your team doing a little intro or in the future just for a legislator briefing that maybe it could be a brown bag lunch, I found when those opportunities happen, you're not gonna get 80 legislators that show up. Right. You might get five.
Right. But it is because these type of things, I feel really special that we get this, but there's two of us here. And I know that many other legislators, they'll hear about a particular piece of legislation that comes through their committee. Maybe they're on the jobs committee. But for many of them, they don't.
So as we're crafting the budget, and if you were to say, oh, we're putting they of course, the film and tax credit, they they got that. But if you're to say the Jobs First program, they may not have an idea. So I just think in the future, being able to offer these little brown bag kind of informational
Redner 2
to do that and, you know, tell us where to show up and we'll bring placemats for everyone and maps and
Redner 2
We would be delighted and then we can sort of even share some of the works, some of the projects that have been funded through this in in in people's districts, which I think would be, which we try to do. We try to share that information. But as you point out, people have a lot of things, on their plate, and we do understand that. And people are at different points in their own legislative careers, so we'd be happy to.
Redner 1
We've we've kept you very quite a long time, but just if you could when we go back to telling the California story as far as can you just give us a little explanation of explaining what that looks like as far as the branding and what you're envisioning that to look like?
Redner 2
Yeah. And as I said, we're still in the RFP process, and so when we bring on our partner, we will co create some of that look and feel obviously with them. But the general idea and, you know, a lot of people were interested in being part of this when we put this RFP out there, is to tell the California story. You would think that everybody's leaving California, the economy is collapsing, that nobody wants to be here. Right?
And it turns out that none of that is true. So our economy is a $4,250,000,000,000 economy. We grew 5% last year, more than any state in the country. We have so we have the largest economy only we we did go from fourth to fifth because of really because of exchange rates, so it's really a monetary issue. I can tell you who I blame for that.
So but only Germany, Japan, The US, and China have bigger economies than California, and that has been thus for quite a while. We've moved up a couple of places over over the over the last twenty years or so. We have more fortune 500 companies here. We have more small business starts. We have more unicorns.
Those are startup companies worth more than a billion dollars. We have last year, we over the last twenty years, half of venture capital money has come to California companies. Last year was 62%. Right? Nobody even comes close.
No other comp state comes close. In certain sectors like space, again, don't we dominate. You've seen all these stories about how that you can't get a U Haul because everybody's fleeing towards the border. In the Census Bureau's 2024 numbers, which is the last year available, California was the fourth lowest state in terms of the number of people per capita leaving and moving to another state. The fourth lowest.
K. Lower than Florida, lower than a lot of these states, the Arizona, Nevada, places where everybody's allegedly going. More fewer Californians are leaving. So, you know, that those are the kind of stories that we wanna tell. And we have the best higher education system in the world.
Right? We have more engineers than any other state by far, more Nobel laureates, more more patents by far than any other state, which means there's more opportunity for tech transfer and new industries to to thrive. We you you know, there I could go on and on, but those are the that's the kind of information that we think people don't know. You know, the the Fortune does, like, what are the 100 most influential companies in the world? 25 of them are in California.
Not 25 of them are in The US. In the world, twenty twenty a quarter of the world's most influential companies are in California. So, you know and again, we have the best higher education system. It's not I mean, the UC is unparalleled, but then we have Stanford and we have
Redner 1
That's right. The titans. Now I I really do appreciate this initiative. I know there's been questions about it, And it always surprises me that, whatever side of the aisle you're on, Republican, Independent, Democrat, why you wouldn't wanna be the cheerleader for your state. Right.
Why you wouldn't want to show off. Why you would we know that in marketing, if you have a product, you market it. And when you market it, you get more sales if you have those dollars to do that. And so to kind of lean into these dollars and say, oh, this is all x, y, or z, why don't we want to be showcasing, as you mentioned, many facts and also deciphering them from facts versus fiction. Because every day with the battles we have with social media, with influencers who make up things all day long, speaking of fake news, change names of bills, make allegations that we we have to be the ones responsible for leading the narrative.
And it's just like a team. If you support your local college football, you wanna cheer for them. If you live in California, we should want to amplify and recognize it anytime we can. But it seems like there are people who wanna just run it into the ground, and it's pretty disappointing. So with that, we've kept you here quite a long time.
We appreciate you being here, and, thank you so much for all of your service.
Redner 1
Thank you, madam chairman. Alright. And some of these issues that were overviewed will now be discussed, and we will take comments on each one of these issues after. So we're gonna bring up jobs first, and this is the trailer build language on this item? Welcome, and please introduce yourself.
Redner 7
Good afternoon, chair Quirksilva and committee members. Thank you very much for having us, and for the opportunity. My name is Emily Desai. I serve as the chief deputy director for the governor's office of business and economic development. Chair, I just wanna make a quick comment that to your excellent suggestion, I'm proud to say we're actually sharing the placemats with all of our legislative colleagues this week.
So we will be sharing those and and appreciate the recommendation and the opportunity to do the brown bags as you mentioned. The first proposal we have, in front of you for your consideration, is focused on the Jobs First trailer bill language. In coordination with EDD and LWDA, our request is for a re reappropriation from previous budget acts to extend the encumbrance from two appropriations. The budget acts of 2024 and 2025 included an appropriation of $50,000,000 in funding each year for California Jobs First within EDD's budget. Of the total $100,000,000 appropriation, $95,000,000 has been deployed in grants to 18 counties and 14 Native American tribes to spur projects focused on key industries sectors as director Myers outlined earlier.
Today, we are respectfully requesting an extension on the encumbrance deadline of the remaining $5,000,000 in admin dollars from 06/30/2026 and 2027 to 06/30/2028 and 2029 respectively. This ask is in order to help us ensure that we have the capacity and the resources necessary to continue to support those grants that have been made in this time period. Strategies and plans are only as valuable as the work put in to implement them. Our regional partners are looking to the state to help teach and partner with them to support the creation, attraction, preservation, and access to jobs, which makes this encumbrance extension critically important for the success. We have also crafted trailer bill language which complements the BCP and codifies the work of the Office of Regional Economic Development Initiatives, which my colleague Dennis Stroud, who has joined me today, helps lead.
That office really focuses on building relationships with the regions to focus on things like technical assistance, supporting and building capital stacks, permit streamlining, and more. Adding this office to statute will assure regional partners that they can continue to count on GOBIS as a strategic partner. So Dana and I are pleased to answer any questions that you might have. Thank you.
Redner 4
Here we are. Jesse Romine, department of finance. No further comment at this time, but available for questions.
Redner 1
Rowan? Nut? I'm just joking here. Alright. We're always so serious in these committees.
Gotta relax a little bit. Alright. Assembly member. Nope? You good?
Alright. I just I said if we could get a kind of map of the regions. I know some of them off the top of my head, and but I don't know all of them. And just as I come from Orange County, can you give me any highlights on Orange County? Yes,
Redner 8
madam chair. Thank you for the question. Orange County is its own region. As we noted, there are 13 regions. Orange County itself is its own region, and it it has been, successfully administering the catalyst grants that it was awarded.
And so multiple groups within the region have received that funding. A variety of different, NGOs that are supporting arts, supporting workforce development initiatives, and supporting economic development opportunities in their backyard, have all received that funding to, help with their growth in the in the region. But additionally to that, they, have the regional strategy that they're working to implement, And Orange County itself created a very unique opportunity for their, what we call, sector coordinators that they have retained the services of to help grow their target sectors that they identified in their regional strategy. And this unique opportunity that they've created, has leveraged the local intelligence, the local information on these target sectors, and they have started to build their activation plans for implementing the regional targeted sectors that they've identified in their strategy. So items such as the creative economy, such as aerospace and defense, such as clean economy, they've got sector coordinators that are now working on developing and implementing their activation plans that have targeted projects, targeted initiatives that they are helping to launch to grow those sectors in their region.
It's a very unique situation that they have created through the way that they have developed their sector coordinators in in the region.
Redner 1
Well, I'm biased, but I think that you have my former district director as one of your leads there, Jesse Benron. And so, of course, they're doing unique and focused and activated plans. No. He's an excellent leader, and I'm glad that he's doing that work with you.
Redner 6
Thank you, chair. Thanks for your presentation. Can you tell us a little bit more about the 100,000,000, and can you tell us how much has been expended or re encumbered, and how much of the funding has been used?
Redner 7
Yes. Of of the 100,000,000, 95,000,000 has been, expended, in the form of grants, through the re RII initiative as well as funding for tribal communities. And, Dana, if you wanna perhaps give some highlights?
Redner 8
I will. Certainly. So in round one of what we called our regional in, regional implementation initiative or RII, we awarded $80,000,000 to 11 different projects throughout the state. We had four different target clusters, sector clusters that were awarded funding. This included aerospace and defense.
That was through, our Central Coast cluster. We also had the bioeconomy that was through the Central Valley cluster that came forward. We supported the bio life sciences out of the Los Angeles cluster, and then we have also, supported the agribusiness, and ag tech sector through a project that came through with our our University California Ag and Natural Resources, and this was a multiple county project that is helping to grow ag tech. So each of those clusters each received their level of funding, and that is the 80,000,000 that was funded originally out of those four clusters. Additionally to that, there was $15,000,000 that was awarded to 14 tribal communities throughout the state for a variety of different projects that included everything from a, building facility that was needed on their, on their site, to some workforce development training opportunities, and in addition to some business growth and revolving fund opportunities through the, tribal initiatives.
So 80,000,000 that was around RII round one, 15,000,000 that was through the tribal equals the 95,000,000 that has, been expended.
Redner 6
Thanks for sharing that. And are is this information up on your website? How can we track, some of these monies to see how they continue to support some of these these investments?
Redner 8
And use? Yes. You. On the GoBiz website, we have posted the awardees from round one. We've also included the slide deck presentations from each of the awardees that went through the pitch process from from last year's, round one.
And there that's an opportunity to see more detail as to the projects and the work that they are implementing through the award itself, and the full list of the projects are on that GOBiz website. We'll make sure you have the link, to that because it's there's multiple documents on there that you can, you can visit and, to learn more about each of those projects.
Redner 6
Thank you for sharing that. And just curious, were there any what did the GoBiz team learn in this process? Curious about the number of applicants. Like, were you seeing obviously, you have finite number of dollars. How many applications did you receive versus how many that you obviously, you awarded 11 different projects or clusters, as you mentioned.
Can you talk to us about what you learned in giving these these grants out?
Redner 7
I'll I'll share one high level thing, and then and then Dana, I know, has has a lot more commentary. One thing that was very clear to us to your point about our inability to meet the the volume and demand is the importance of bringing other partners to the table. So be that private sector and philanthropic partners to make sure that either we were looking to make sure that projects we were funding were leveraged by additional resources and had an element of sustainability. Or for those projects that we were ultimately unable to award, we were able to identify other sources of funding and not only by external sources, private or philanthropic, but also in making sure that we look to see where there might be state funding, outside of these Jobs First dollars that might also apply, which also helped avoid any sort of duplication, etcetera. So it really brought us, you know, the opportunity to really make sure that we were leveraging external partners and and then state dollars as efficiently as effectively as possible.
Redner 8
So in our round one that was, held last year, the RII round one, we ended up with 75 projects that were invited to submit, their full applications. We had a pre application process and a full application process. You had to meet certain criteria to be advanced to your full application. With 75 projects, of those, we had 35 that were invited based on scoring and evaluation to provide their pitch presentations. Out of those 35 that presented, 11 of those were awarded.
Redner 13
So what we learned through the process was, number one, there are some amazing projects throughout the state that are certainly worthy of and in need of funding to assist with implementation of their respective projects. Number two, the projects cut across those multiple sectors that are identified in the state's economic blueprint and on your placemat. So we had everything from, as in referenced earlier, life sciences, bioeconomy, to wood utilization and and these other multiple sectors. So I would we would our learning was there are multiple interests in these various sectors identified on our placemat and a desire for projects to move forward with some additional funding. The last part that we've learned into to, Emily's note, we have state agencies that also have funding that we want to bring these projects to them as well for consideration into the future where there may be some more more funding or the type of funding that would help support these other projects.
Redner 8
And so through our relationship building with our fellow state agencies, we are starting to identify some other buckets that may be available to support these projects moving forward. But, certainly, many, many worthy projects that are targeted on these sectors for sector growth in California, and that is, I think, what was most exciting because we did have these the blueprint that came out in February that identified these sectors and these project applicants who quickly have had pulled together projects that aligned with those sectors.
Redner 6
Great. Thank you both. And I just pulled up your website and started reading more about some of the great awardees that you had, so look forward to following up and reading more.
Redner 1
Thank you both. Thank you. No no more questions from here. Before we move to public comments on just this item, there is a request to pull issue 11 off the nonpresentation item, which we will be doing. We will hear issue 11 after issue eight.
So that will take us to public comments on this item only, which is number two jobs first administration resource trailer bill.
Redner 2
Good afternoon, chairing members. I'm Christina Rico with the Small Business Development Centers in support of Jobs First and the Jobs First Blueprint. The SBDCs have a $26,000,000 ask to expand funding under Cal OSBA, under SIP and TAP. And the because the investment delivers measurable results aligned with the mission of GOBiz, driving economic growth and and opportunity statewide, it's in line with the Jobs First Blueprint. And over three years, the SBDCs have helped small businesses access more than 4,200,000,000 in capital, create 10,000 new businesses, and support more than 415,000 jobs, which is real on the ground economic opportunity in our state in a time when we really need that support with so much uncertainty globally and, in our, home country.
Redner 1
Thank you. I think that's it unless we have any final comments. K. Thank you. We're gonna move now to CalExport.
Redner 7
Thank you, chair. Our second item, for your consideration, GOBIS has requested 1,400,000 annually to scale export promotion efforts and create the California Export Promotion Program. CalExport leverages our existing federal program to provide export promotion and supply chain resiliency program for small businesses as California's flagship trade program. GOVIS projects this funding would serve at least 300 unique businesses and generate over $335,000,000 in sales, which is effectively one of the main metrics we use to to quantify success and create or retain at least 200 jobs annually. The programming would be broken out into three categories, export promotion, which is really working with businesses on vouchers, sort of like micro grants that those businesses would get to support export activities.
That's things like, expanding into international markets or testing supply, products, export training, helping more small businesses become familiar with how to export and the benefits of doing it, and then supply chain resiliency programming, which would help, provide training and consulting with small businesses on best practices and strategies in building a resilient supply chain. Tricia Utterback is one of three trade and investment representatives that we have on the international affairs and trade team. She and I are happy to address any questions and talk more about this particular program.
Redner 4
Department of Finance. Jesse Romine, Department of Finance. The administration will just reiterate that the objective of the request to provide stable ongoing funding for Goviz to promote international trade by supporting small firms and giving them access to global markets as it's unanticipated for the federal state trade expansion work to materialize in the current year or ongoing.
Redner 3
Rowan Isaacs, LAO. So our office definitely recognizes the potential benefits of enhancing export assistance through this program, and there are many legitimate concerns about the future of a lot of federally funded programs. And, you know, as our colleague at finance has said, you know, there's some indications that maybe this program won't be available in the upcoming fiscal year. But I think, you know, what we would say is that in light of the fact that the state faces many programs that receive federal funds, and now those funds may be cut back or reduced in some fashion, you know, Medi Cal being an obvious and very large example, you know, the legislature needs to consider in the context of the of the budget situation which of these programs that are seeing reduced federal funding to prioritize in terms of backfilling. And so given that, you know, we haven't we have not confirmed the, you know, the discontinuation of the STEP program at the federal level, you know, officially, temporarily, or definitely not permanently, you know, there are maybe some other options for the legislature to consider if it wants to try and, you know, maintain the state's, export promotion capacity.
You know, one thing it could do is to make the funding conditional on whether the federal funding is available or not or potentially fund it on a limited term basis and, you know, wait for wait for the wait until we see the long term future of the STEP program at the federal level before committing permanent ongoing resources.
Redner 6
Thank you, chair. Thanks for your presentation. Do you have a response to anything that the LEO just mentioned in their analysis?
Redner 7
Yeah. I I appreciate that perspective, and I certainly appreciate the many difficult decisions that you all are weighing in a challenged budget environment. What I would emphasize is that, the federal funding does not look likely to come back as as definitively as we can say that we are saying it. I'm the chair of the State International Development Organization, which is the national, entity that represents all state trade offices. I'm I'm the board chair this year.
This is an issue we are discussing with our counterparts across the country. I met earlier in February with the US Senate Small Business Committee where we talked about the fact that this funding does not appear to continue to be moving forward, by the SBA. We also know that the recently released budget by the the president cuts SBA funding by 67%, including this program. So with all definitive, you know, markers, that is is what we can tell so far. That being said, even if federal funding did find its way back as it has in prior years, we consistently have unmet demand for this program.
Last year, for example, with the funding that we had available, we were only able to serve 40%, four zero, of the applicants that came forward. So maintaining the baseline level that we have now, is critically important for program continuity and to ensure that those small businesses, especially given the volatility that they continue to encounter, have a steady stable source of funding.
Redner 6
Thank you for sharing that. And and kind of to follow-up from my questions earlier with miss Myers and kind of the piece around foreign direct investment, obviously, has a direct tie into that. Can you you talk a little bit about GOBiz's role, your role specifically? I think one of the things that I hear in some of the hearings in the committees in the committee that I chair on, Asia California trade and investment, has been really the need for this one stop shop and knowing that, GOBiz is, one, working to attract business to California, working to market California, all those good things. The but, you know, in terms of where they can go, businesses can go from other countries to get help to navigate our laws, our rules, our regs.
Can you walk me through what that looks like? How can we direct some of these businesses that we're meeting with, to your office? And and what work can you can you help them with?
Redner 7
Thank you for the question, and thank you for the work that you're doing on the select committee to this effort. So we have three trade and investment representatives within our team. Tricia oversees Europe and The Middle East. Her counter another counterpart who oversees Asia and then another that does The Americas and Oceania. Those three trade and investment representatives are responsible both for trade and export activity, but also for foreign investment.
Redner 12
I sort of see their roles as sort of the the front sales leads. So Tricia and and her counterparts will be working with the US embassies and commercial service representatives across the world to ensure that those businesses that are looking to grow or expand in in California from overseas markets sort of are funneled to come to the international affairs and trade team with our trade and investment representatives. We treat those foreign businesses just as we would any other that is looking to expand, helping them navigate incentives, identifying permitting constraints, and other things. But much to your point, assembly member, we also know that foreign owned businesses might make face specific circumstances that are unique and and distinct from domestic businesses. So we also have very tactical things like an international investor starter kit, and that's a a resource that we have where we do individual consulting with each business to say, we don't have a social security number.
Redner 7
Here's how to open a bank account, or this is what it means to register with the secretary of state. Here are some connections to local entities because in The United States and in California particular in particular, meeting with local representatives is critically important. We have two foreign investment specialists that work with our trade and investment representatives to directly support those small businesses. Other efforts that the GOBAZ international team does, we're actually gearing up in two weeks to lead a very large delegation, more than 40 people from economic development organizations across the state to the SelectUSA Foreign Investment Conference. California has a big pavilion there where we will be meeting with more than 5,000 vetted foreign investors, organized by the US Department of Commerce.
It's the most important foreign investment, event in the in the in the world. And so we are really proud to sort of use the state's convening power to bring all those local economic development partners under the California umbrella, to meet with foreign investors. We, just a few weeks prior to that, for the first time, actually hosted a a what we call an inbound foreign investment mission. There's a major ag tech conference that took place in San Francisco. We worked with a number of the consulates that are based in San Francisco for businesses that were coming in for that ag tech conference and then worked with local partners in Merced and actually brought those foreign investors out on a bus to see some real time opportunities for investment in Merced.
And we worked with a a great collection of of, you know, local partners in Merced to talk about the AgTech investment opportunities, sort of leveraging all of the businesses coming into town in San Francisco for that AgTech conferences and then and then bringing them to Merced. So we do a lot of different work. We would love to to find ways to continue to partner and, of course, welcome referrals. Foreign investment, you know, as as the director said, we're the number one state with jobs supported by it, and so we know how important it is to our economy. Thank you
Redner 6
for sharing that, and would love to, you know, really find ways to continue partnering. I'm not the only member who has a select committee, you know, in
Redner 6
international relations and international trade realm. There as somebody member David Alvarez also has one on Mexico. You know, assembly member Gibson has one on ports, which has, obviously, a lot of crossover in the work that you do. And so I think, you know, more than anything, would love to see, your team reach out to members. I would love to work with you, because, you know, you're one branch of government, we're another.
And I think that the more that we can do to continue ensuring that it's more than just the voice of, the federal government to have when we're talking about trade relations and all these things and tariffs, that that's not the only voice that we hear in the space is is really, really important. And so I think this is a space where we we definitely need to to tag team, and, I think we have, our chair might be interested in your select USA Committee if you wanna share some information. But and the last question that I'll ask is, what are states doing? Do they have programs? I know you're chair right now.
Do they have similar programs to what you're doing? Is California unique in this way? Are they also working to attract business into their state?
Redner 7
We we appreciate the question. Yes. Each state, you know, operates a little bit differently. Many states have foreign investment as sort of a separate part of the of the work. But as it relates to this particular BCP, most governor's offices or or, like, departments of commerce have a trade office that historically has operated the STEP program, which is the federal grant that predated what we are asking for here, is Cal export.
Our BCP does outline a few states by comparison, states that have made more permanent state level investments into supporting their export and foreign investment programming. So Tricia perhaps can touch on a few of those states. But that is what we are looking to do is is with the economy the size and scale of California, so we really want that trade and investment program commensurate with the size of the California economy and, again, to ensure that we have continuity and services for our small businesses.
Redner 9
Yep. Thank you, Emily. Just for a few of the top states and their programs, the state of New York with a GDP of 2,232,000,000,000 has invested 1,500,000 in their global New York grant fund. That fund is administered through 10 trade managers and three admins, so three total staff, to operate this program. They do trade missions export microgrants to their businesses.
Redner 11
Another example that that's unique is Ohio. Ohio uses a nonprofit entity called Jobs who uses all profits from sales of spirits to fund economic development activities, including international trade efforts. The state of Delaware actually has declined to use the STEP program recently because of the administrative burden and has replicated the program using their own funds from the Delaware Department of State. Happy to give a couple more if interested.
Redner 6
No. That's super helpful. We'd love to follow-up with both of you after this. Thank you for your presentation.
Redner 1
Alright. I think we are going to we're going to do two things. Number one is we're going to have the public, respond on this. Then we're gonna go through items four and five very quickly as we need to start moving very quickly through this agenda. And then I apologize to those who are waiting.
We are gonna right after item number two, we are going to move up the California State Teachers' Retirement ahead. I said after item eight, but we're moving it up. So alright. Public comments on this item. Welcome.
Redner 10
Hi. Christina Rico again with the SBDC's in support of CalExport. The small business development centers have partnered for many years with the state and GOBIS to assist small businesses to obtain the STEP grants directed to go to trade centers, explore and understand international markets, navigate import export rules, and are now assisting companies navigating tariff refunds. The SBDCs provide expert level assistance and individualized assistance to help companies expand to international markets with training and one on one business consulting. An example is the long term work SBDC has done assisting a company like Navo Brazil Brewing in San Diego to expand their sales to international markets.
Redner 1
Thank you. Appreciate that. That's gonna close item number three. We're gonna go to item number four, film and television tax credit staffing.
Redner 7
Thank you, chair. I'll be I'll be very brief on this. The California Film Commission under the GOBIS office requests 472,000 to support three permanent positions to ensure we have the capacity, thanks to the support from the legislature to continue to grow the program as it has doubled, and to meet the, increased demand in services and applications. Joining me, for questions, Leah Madrona oversees this program and is happy to address, questions from you, chair and from the committee.
Redner 5
JT Creedon, department of finance. No further comments. Just here for questions. Thank you.
Redner 27
Rowan Isaacs, LAO. So as you heard from the department, you know, given the changes that were made in the size of the program overall as well as the DEAA and a b one one three eight, which potentially most significantly, like, very much very generously very substantially increase the generosity of the tax credit. And so we anticipate that, you know, there would be a sizable increase in applications and work associated for GoBiz, and, you know, we recommend approving this request so that the department can adequately evaluate all applications.
Redner 6
Thank you, chair. Thanks so much for your work on the FIM tax credit. Would love to hear how, program four point o is going. How many applications did you receive? What does the demand look like?
And, also, can you just talk about, where the productions are? I know one of the, you know, concerns that, our colleagues had raised outside of Southern California, outside of LA, was whether or not any production would come to their district, their part of town outside of Hollywood and LA. Can you talk a little bit about that?
Redner 3
Thank you for that question, assembly member Coloza, and thank you, chair, for hearing us this afternoon. Leah Medrano, deputy director of the tax credit program at the California Film Commission. And our main mission at the California Film Commission is to make sure that we retain, attract, and grow production filmmaking here in California. And since the inception of the tax credit program, we had approved more than 800 projects into the program, incurring $32,000,000,000 in the state of California. And thank you to the efforts of the legislature.
Redner 12
AB eleven thirty eight was signed into law back in July on 07/03/2025. And as of July 7, the program was up and running. We received an increase of 400% in applications received compared to the last fiscal year. And to date, we had received 309 applications, and that is a 43% increase of applications again compared to the same time window from program three point o, the last fiscal year of the program.
Redner 6
Thank you for sharing that. Can you talk a little bit about where they are geographically or some of the do you you have a sense of where
Redner 12
So we have a number of productions filming out of zone, and this is the 30 mile zone within Los Angeles. And this is this is a list of all the productions that do plan to film outside of the LA area. Specifically, we have a total of 4,300 out of zone filming. And specifically under program four point o, 1,188 will be filmed up and down the state of California. We have Big Bear, San Francisco, Alameda, Marin County, Riverside, Mono, Monterey.
We have Riverside County, Palm Springs. So we are seeing a lot of economic activity up and down the state of California because of the tax credit program.
Redner 6
Amazing. Thanks so much for sharing that, and we'd love to get that list if it's not already up on your website. And I just think that that piece is really important because I know, obviously, there's a lot of concern from our colleagues outside of the LA area, as I mentioned, about whether or not they would get production. And, I think that's great. And I also did wanna commend the program.
I really appreciate seeing, a lot of the press releases, which I track, for the productions that do get the tax credit, and exactly where we where they are, how many jobs we're keep we're keeping. This is a a big issue in my district as I have a lot of entertainment workers who are unemployed and, unfortunately, still are unemployed, but things are getting better and are making progress. So thanks for for your work on this program.
Redner 1
Yeah. I have no questions. And, any additional comments? No additional comments. Alright.
Seeing none, we'll take it to the public. Any comments on item number four, film and tax credit? Seeing none, thank you for your work. Appreciate it.
Redner 1
Alright. Going to item number five, innovation and emerging technologies.
Redner 7
Thank you, chair. Our final request in front of you today, our department requests 400,000 general funds and ongoing to support one permanent position, an assistant deputy director and a graduate student position to operationalize and expand GoViz's work to attract, retain, and grow innovation and emerging tech sectors, including quantum and fusion, and many others here in California. Director Myers talked a lot about the bet and accelerate sectors. These are the specific, industry categories that we really wanna target by building out this expertise and these resources within our team. Here to address any questions along with me is Trey Bradley, our deputy director for emerging tech and innovation.
Thank you, chair.
Redner 6
You guys went so quickly. Can you just give us, you know, just a general presentation on on this on this item, on this BCP, and what you're requesting?
Redner 13
Yeah. So, basically, thank you for the opportunity to be here. I'm very excited to bring up this BCP because, you know, we are in an unparalleled time in California's economy. We have a subset of sectors that have the highest compound annual growth rates in the entire country, like artificial intelligence, like quantum, like fusion. Then of of on top of that, of what director Myers alluded to, we have the highest amount of venture capital California's ever had.
It's actually 62% the last quarter with UCLA Anderson economic forecast puts California at, like, 71 or 72% of all US venture capital. First time over half a billion startups, unicorn. First time California has eclipsed over a third of all US value added r and d. And so to capture this amount of both investment opportunity and rate of disruption innovation, we kind of looked around at GoBiz and realized this position was not there. So so the state used to have an existing emerging tech role and portfolio that managed several programs.
They were eliminated several a couple decades ago. They worked with the California Centers for Science and Innovation, which the legislature has funded every single year that exists across multiple UC campuses. And so really looking at that position and being a point person for someone at GoBiz who can work with the national labs, who can work with our federally funded research and development centers, our university affiliate research centers, which are all funded by the federal government, and then also working with these companies to provide incentive navigation services, business services like site selection that are tailored specifically to them. Just because their emerging technologies are so new, sometimes it's a little bit more challenging for them to understand how they fit in our existing incentive portfolio.
Redner 7
And, assembly member, if I can just add, just practically speaking, this staff will support Trey's team to do things like targeted sector convenings, workshops, demo days, in region activities, providing technical assistance and support on things like federal funding bids, marketing resources, just overall support for the particular needs of of ensuring that California continues to capture and retain these very important sectors.
Redner 6
Thanks for sharing that, and thanks for your presentation. I know that BCP only discusses one position. Can you explain how the graduate assistants are being paid? How does that work with the BCP that you're requesting? I know there's a request between an assistant and associate deputy director.
Redner 13
Right. Yes. So the graduate student position is a little bit unique how it's set up in state government. It is a it is a position classification. And the reason that they're the funding ranges there is because some of them have they're required to be within school at the time and show proof that they're in school.
So some of them have a range between 50 to 70 k for one if they go all throughout the year. Oftentimes, it's not many times that you have a graduate student assistant through the entire fiscal year. So with the ideas that this would support not only one full time graduate student assistant, but likely it'd be enough for a part time of another. So many graduate student assistants choose only based with you know, you hire them under CalHR with the the classification. Some of them maybe only can do a semester or two quarters depending on where, they're currently set up.
So it's just it's a little bit unique in that regard from a budgeting perspective.
Redner 6
Thank you for sharing that. As somebody who relies a lot on interns, and I wish I had graduates, I I get it. So I know that's probably much needed help to to do what you're you're trying to do. And then just a last question from me. I know the governor's budget included $4,000,000 of funding for Quantum.
Can you just give us an update on that funding? How is it being utilized?
Redner 13
Yes. The the and we're absolutely thankful, for these funding. So both the budget item for 4,000,000 quantum and then as director Myers alluded, there's a 5,000,000, for fusion at the California Energy Commission. For I think for both of these programs, which are you know, they're both dealing with, the physical sciences. They have a lot of similarity.
Actually, they a lot of overlap in workforce too. Is the intent with both of these funding is to get the funding out the door, out into communities practice, two innovators, two companies, two startups in the space. So portion of that funding, we're looking for establishing a micro grant program, which will be available to quantum innovators. But, also, we'll be able to leverage several large pieces of federal funding. That is a lot of what our work is doing is there's so much funding at the NSF and the DOE relative to quantum, including some that several that were announced right now that we have lots of individual, both university partners and businesses who are pursuing that funding that we wanna be able to support in their pursuit of that money.
Redner 16
But then another piece of the other port portion of the 4,000,000 is really about building state capacity around emerging technologies and understanding emerging technologies. So being able to educate, and we were talking about director Myers mentioned all the range of different agencies. We, as GOBA, has worked with the incentive programs, the employment training panel, CATEFA, you know, working with the energy commission, the grant programs, to be able to educate, different state level civil service staff about what, example, quantum computing or quantum sensing technology is used for. So being able to prepare and have the analytical staff in these programs who design be ready at the ready for when this technology comes and is ready to be used. So it's an really the state capacity building piece.
Redner 7
And for the second point that Trey was referencing, that effort to help support state staff, that's specifically around an emerging tech state staff academy. That work has been done in the past on things like AI. So there's a best practice model that I think we would look to follow. To Trey's point again, to make sure that our regulatory agencies, our counterparts are more familiar with these industries and therefore better positioned to think about how to support and oversee them.
Redner 6
And then, sorry, miss chair. Madam chair, one last question for me. I know, obviously, we we talked about and I asked you a question about these $4,000,000 that we're investing. Can you just explain, to folks who might be listening, like, what is quantum computing? Can you just That's a Trey question.
Redner 13
Yeah. So we're gonna like I said, not only are we at this rapid pace place of disruption with things like artificial intelligence, I mean, I've and computing. I mean, computing I mean, the for example, the we just watched Artemis two go to the moon. Right? People have these Ray Ban Metaglasses.
The glasses the computer in the glasses is a 100,000 times more powerful than the computer that served the Apollo service module that took Neil Armstrong to the moon. Just to give it a sense of, like, the scale. And so we have traditional computing, which powers AI. Right? And so, powers GPUs and servers and chips, which powers the standard computing modules that we have.
Then we have quantum computing, and so leveraging quantum physics. And so a lot of people like to think that quantum is the next AI, and it's known it's very different. A lot of technicians in quantum, it's cryogenic facilities and vacuum tubes. But it's leveraging the problem the mechanics of quantum mechanics to be able to do and solve certain problems that we cannot solve today. So a great example for quantum is being able to do new chemistries for batteries or a drug discovery to solve different problems that related to health care.
Transportation, using quantum sensing to find two points over traditional sensors like LiDAR. A great example is in space is there's no GPS in outer planets, so we have places like NASA g p l JPL in our state. We want to make quantum sensors so you can be able to see the surface of planets across the solar system. So we have these three things that are happening at the same time, AI, fusion, and quantum. I always say that AI and standard computing will solve a subset of problems, and it's good at doing that.
Quantum will be the other set. Things like the drug discovery, chemistry, the natural sciences, it's leveraging quantum physics to be able to find the point, find the answer directly without having to power through a bunch of compute.
Redner 6
Super helpful. Thank you. I'm sure there's folks at home who are wondering, what are we talking about? What is quantum? So thank you for breaking that down.
I really appreciate it, and, I don't have any further questions right now. Thanks.
Redner 1
I'm just gonna keep it short here. I don't have any disagreements with these asks individually as entity, whether it's GoBiz or any of the other offices. I will say at this point in the hearing, you know, it's 400,000 here, 400,000 there, 1.5. It's not you go biz. I'm just saying as a whole, it starts to add up.
And because this is the committee that hears these types of ask, we also have other committees that are seeing huge cuts, and it it starts to become this, I when I hear you talk about quantum, it's exciting. I can see how invested you are. When you say $400,000 for a staff member, thank you for clarifying it would be some, assistance. I was getting into that mood where I was a few weeks back. Ruin knows where it's like, how much are we paying so and so?
Because it's really hard time out there in the public. And I know investment, whether it's exporting or importing for economy, brings in dollars. So we want to make sure we continue to sustain go biz, and even elevate it. But as a whole, the ask seem, generally, they start to add up. I know each department's only looking through the lens of their department, but it is quite hefty when we start to look at, for example, human services where we're cutting IHSS, we're cutting health care.
So not to make you feel bad about your department, but just to know that that's what lays on our shoulders when we actually go down and do the math to balance at a budget. And in many cases, we'll be cutting. But I get that balance of keeping the economy in the front, making sure we retain businesses, making sure we promote businesses, all of those things. That being said, do we have any comments from the public on this item?
Redner 10
We'll be very quick. Okay. Christina Rico in support of GoBiz's BCP and the work in innovation and emerging technologies that they do. The SBDC's have been critical partners to growing California's innovative and technology companies. SBDC's in the past three years provided 45,000 of consulting for innovative companies helping start startups obtain over 2,000,000,000 in equity capital, 27%, which was for women and people of color as opposed to the market where less than 1% of equity investments go to women and people of color.
Thanks.
Redner 1
Appreciate. Thank you. Alright. That is gonna close out that item. Innovation and emerging wait.
We just finished that one. Alright. That finishes our item number two completely. Now we are going to, I apologize, jump all the way down to California State's teacher retirement system, CalSTRS. Do we have do we do we have info on this?
Redner 11
So good afternoon, madam chair and member of the sub members of the subcommittee. Thank you for having us here today. My name is Art Martinez. I'm the director of financial planning, accounting, and reporting for the California State Teachers Retirement System. I'm joined here today by Scott with Scott Chan, chief investment officer.
Redner 14
So CalSTRS is the largest educator only pension fund in the world. We administer a hybrid retirement system that consists of traditional defined benefit, cash balance, and voluntary defined contribution plans and provide disability and survivor benefits for prekindergarten through community college public school educators. As a special fund agency, CalSTRS is funded primarily through the contributions we receive from the teachers, school districts in the state along with investment returns. These funds are held in trust for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the system. For the twenty sixtwenty seven fiscal year, CalSTRS submitted two budget change proposals, of which we are requested to present the investment portfolio management BCP.
This proposal includes $5,700,000 to establish 25 permanently authorized positions to enhance the ability to prudently manage the CalSTRS investment portfolio and create value through expanded internal expertise. The proposal advances CalSTRS strategic plan goals and objectives and ensures we meet ensures that we meet our mission, which is to secure the financial future of California's educators. I respectfully ask for your support, and we're happy to take any questions that you have for us at this time.
Redner 1
Thank you. Department of finance. Kayla Landman, department of finance. Nothing to add available for questions. LAO?
Redner 6
Thank you, chair. Thanks, for your presentation. Can you just tell us a little bit more about the 25 new positions? What kind of functions will they have? I know you've been growing exponentially each year.
You can just elaborate.
Redner 16
Yeah. Thank you. I I'm honored to be here, and I really appreciate all the work you do. I appreciate the partnership with the state of California. And I just wanted to to go back and and there's been a a broader evolution at foot at CalSTRS.
And what we've been attempting to do is increase internal management at at CalSTRS to save tremendous costs because there there are really two routes we can take in prudently managing the portfolio. One, we can manage it in house, or two, we can hire an external management firm to do it on our behalf. When we do that, the cost is exponential. So over the past, you know, five, ten years, we've been internalizing more of our management and and saving fees. So if you if you look back over the last, call it, seven years, we saved roughly 2,600,000,000 or so in cost savings.
We're at a run rate of the last record of the last year of record of saving roughly 550,000,000 in cost. And I'm I'm mentioning this because as we think about the resources we need in prudently managing the portfolio, we're really gearing them around two things. One is to make sure we can implement a diversified portfolio so we can successfully make sure that we return the 7%. And then we're trying to increase the value of returns above that without taking additional risks, lower the cost base in terms of how we manage the portfolio, and then decrease the risks. And so that's an effort for us to to, you know, to increase the internal management.
So, you know, the other elements, you know, of value drivers for us are going to be the one fund approach that we were defining. So if you think about how we've been internalizing more of our management, we're trying to do this as unified one fund, and that produces more scale in in the way we can do things. So for example, one of the things we learned as part of the cloud model is that we not only saved fees when we internalized management, but we were able to develop, for example, platforms where we have the majority ownership of of an of an organization. So we have real estate operating companies, for example. We own one of the largest renewable platforms in in The US.
And as these platforms grow, we not only benefit from the the sourcing and selecting of those assets, but also the growth in in the platform itself. So if I were to to look back and, you know, I I think with where we really connect is is in the contributions from the state. Right? So CalSTRS is going to be funding the staff positions, but what you care about is is how we're prudently managing the portfolio. So if I look back over the last ten years, we generated about 8.1% returns, about 47 basis points of value above our benchmarks.
Redner 5
Over the last five years fiscal years, it's 9.4% with with roughly 76 basis points of of value above our benchmarks. And how that translates to your contributions if we look forward because of the strong performance of the investment portfolio and how it's been managed prudently. You know, essentially, your contributions will likely go in the next year 2027, 4,800,000,000 down to 2,000,000,000 a year, as we look forward into 2028, and that would roughly produce about $28,000,000,000 of savings for the state. So that's you know, these are the reasons why we invest in staff so we can produce either greater returns, lower the cost, or lower the risk. And we have developed a track record of doing that.
Redner 16
If you looked at historically over the past ten years, every dollar we spent on internal staff has generated about $34 of additional value to the fund, so a 34 x return. And as we think about our positions, we think about them in the context of that ROI. The second thing we think about is the growth in AUM. So there are some economies of scale, but as we grow our asset base and we're growing at for example, as I mentioned on a ten year rate, 8.1% a year, that asset base grows. And and roughly speaking, we need one staff member to help us manage between one and a half to two billion additional assets that we grow on per year.
Redner 6
Thank you for that very thorough answer. Did I hear you correctly? You said it was $28,000,000 in savings.
Redner 6
Billion. Okay. So $20,000,000,000 that you're projected in savings because you're gonna have the portfolio managers in house versus contracting that out. Am I understanding that correctly?
Redner 16
Oh, okay. So, sorry. I was, referring to if we continue to perform well out into 2028, the state's contribution will go from 4,800,000,000 to 2,000,000,000, projecting roughly a $28,000,000,000 of savings towards full funding for CalSTRS. We have saved roughly $2,600,000,000 in this effort to more internalize management estimated, and we're at a run rate of about $550,000,000 a year
Redner 6
on savings. Okay. Thanks for sharing that. Can you talk a little bit about the holdings that CalSTRS has? I know you were recently trying to reduce how much climate risks that you had your holdings in.
Can you explain what the portfolio looks like? I have a lot of teachers in my district. And for so many of them, they work their entire lives. Our chair is a former teacher. This is their life savings.
And the teachers in my district are also some of the most vocal when it comes to how we invest their dollars. So can you talk to us about the holdings, some of the climate risks that you're reducing, and then I have some follow-up questions for you after that.
Redner 16
Yeah. We we see the the, you know, climate change as as essentially a scientific you know, to us, it's it's grounded in science. Right? There there's risk of of global warming, and that has drastic economic consequences. So as we invest, we're looking to invest in in sustainable opportunities where and when we can.
And we are hoping that the world moves in that direction, and we can move in advance of that direction. But there is some risk when we move too far in advance because we have to contend with the market pricing those opportunities. I can say say that our portfolio is is ahead in the sense that we've you know, as I account for it, it's it's over $50,000,000,000 of of sustainable investments within climate change. One of the largest positions we have is in our global equity portfolio because that is the largest portfolio within the total fund, and roughly 20% of that is dedicated to a an index that that has reduced carbon emissions, roughly 15% reduced, in comparison to other benchmarks as an example.
Redner 6
So currently today, is, CalSTRS still investing some of your holdings in fossil fuels?
Redner 16
Yes. We we are investing in in fossil fuels, and we see that as as a transition that is necessary. So over time, to get to a path to net zero, we and and I I think the world would would need this transition to occur because there you know, if if if there were no investments outside of if there were no fossil fuel investments, I mean, think about a world where where we wouldn't have any of that energy, of which today there's increasing demands in energy and power. So we we have been investing in that on a path to to also engaging these organizations towards net zero.
Redner 6
Can you talk to me about the other investments that CalSTRS has? Are you familiar whether or not CalSTRS has any investments in ICE detention facilities or other private prison operators?
Redner 16
I'll have to, check some of those specifics, but we did decide to eliminate our private, prison exposures. So I I can check on on, any of the if you have other companies that you want us to to, you know, to to look at and verify, but we did decide to eliminate that exposure.
Redner 6
So to your knowledge today, CalSTRS is not investing in private prison operators?
Redner 16
It yes. That's that that is corrected. Although, I know that it it's tricky depending on the ecosystem in the list and and what you define as, like, that's why I'd be I'd be interested in in understanding if if you have specific companies that you would want me to verify. Just to
Redner 6
And just to recap, CalSTRS, you're obviously the largest educator only pension fund in the world. Your total asset is almost 400,000,000,000. Is that correct?
Redner 6
406,000,000,000? And and so I think it was really important that you present today because that's, you know, over $400,000,000,000 of teachers' retirement that you're actively investing, and you're asking for additional positions so that you can do these things in house. And I do think we owe it to our teachers for them to know where their retirement dollars are going. As I mentioned, teachers in my district are arguably some of the most vocal in policy and budget items. And surely, I would like to think that they would care where their retirement dollars are going.
Redner 1
And, you know, I'll follow-up with your team so we can have a much more detailed conversation about this. But I would like more answers and transparency about what you're doing with our teachers' money and whether or not, you know, there there's any investment being made in some of the areas where I know we have extreme policy differences, you know, moral differences as it relates to all the ways in which our communities are being attacked right now, including things around ICE detention centers, private prison operators. So we'll follow-up with with your team on that, but it would be good to have more transparency and and details. Yeah. Thank you.
Redner 16
Sure. Yeah. Welcome the opportunity to dialogue with with you, myself or with my staff.
Redner 1
Thank you for those answers. And, I think we have a little bit of a difference of opinion here as I'm, one of the teachers that is, close to retiring, and I just care that CalSTRS is stable and the investments are solid. I think there's many, many teachers that that is their livelihood after retiring. And if there's peaks and valleys, we we know that, but it's sustaining the portfolio that's really lifesaving for most teachers as that's their only sense of paycheck to keep it as simple as that. But certainly, looking at what has been haunting us this year, particularly in the legislative body, and it has been an ongoing theme, which is, the ICE detention centers and all of the, if you wanna say, supply chains that, keep those industries afloat.
I think that it's it's, something that you hear at every committee almost on the state assembly floor because it's so triggering for so many of us to imagine that we would be living in a world in one short world year where not only do you have the building and expanding of facilities, but you have children in these, facilities, almost no access. And that's why you're hearing not just when it comes to investments, but all across, you know, yesterday in rev and tax legislation related to ICE detention centers. So it isn't just to shine a spotlight on CalSTRS. It's about what is hovering over the state of California and many other states, but California seems to be one of the targeted areas. And sometimes you feel helpless in this world.
And as legislators, these are some of the few things we can do, which is is find out more about where state dollars go. In this case, it's it's, dollars that have been put into the system by, teachers. So the questions, I think, are timely. What I what I what I said as far as where we differ is my whole focus for CalSTRS or any of our retirement systems is that they stay solid for those individuals who've paid into them because that's what they care most about. With that, do we have any comments from public comments?
Seeing none, we thank you. We know that, this is a privilege to have you join us. Thank you so much.
Redner 1
Alright. That is going to take care of item. Is that ten and eleven? Okay. That's gonna take care of our last item, which was non presentation.
We're gonna move back to state treasurer's office. State treasurer's office, we apologize for bumping you down. We're gonna be as speedy as we can now. Welcome, and please introduce yourself. We are on item number six.
Electronic resources augmentation.
Redner 15
Good afternoon, madam chair and members of the committee. My name is Jeff Worm, and I am the director of the investment division at the state treasurer's office. The state treasurer's office's, investment division is requesting a continuation of augmentation and reimbursements to meet the increasing cost of electronic subscription services for live market feed applications like Bloomberg and Refinitiv and access to the national rating agency applications, Moody's, Fitch, and S and P. These applications are necessary to safely and prudently invest state money for the pulled money investment account or PMIA according to government code section sixteen four thirty. State treasurer's office investment division is also requesting ongoing reimbursement funding for a third party, vendor to provide a modern portfolio tracking system, platform for the PMIA that will improve transparency, streamline workflows, ensure regulatory compliance, and provide analytics.
This new application will replace the current portfolio system, which was created over eight years ago and is on a now outdated platform. We anticipate this new platform will keep the PMIA better prepared for advances in technology and regulatory changes for the foreseeable future. I can answer any questions from the, committee.
Redner 9
Xi Jin Lee, Department of Finance. We have no concern with the portfolio.
Redner 1
Alright. No questions for me. Anybody from the public that would like to speak on this? Thank you for coming. We appreciate it.
And that's gonna close out that item, which is item number six. We are going to item number Oh, we already did seven?
Redner 1
Okay. Six and seven are closed out. We are now moving to item number eight, the expanded staff resources for admin of the sales tech. What? I'm so fast.
You can't believe it.
Redner 21
Okay. Are we able to do public comment for the STO if they're no longer up?
Redner 21
We're not speaking on a specific item just generally. I'm Rachel Moeller. I represent the California Coalition for Community Investment, a statewide coalition of community development financial institutions, CDFIs. I'm also here with the Housing Now coalition, who asked me to share their support as well. We're requesting a $50,000,000 budget request over three years to renew a program under the c f p CPCFA at the state treasurer's office.
The program is the California Investment and Innovation Program or CalIP. CDFIs, as you probably know, are mission driven lenders that serve the as the financial institute or infrastructure for the public good. They build housing, small bit support small businesses. They provide, flexible financing and support to childcare providers and community facilities, especially in communities where traditional financing falls short. We finance communities in every district in California, including underbanked communities in the Central Valley, Inland Empire, rural and tribal communities.
Redner 24
CalIP supports and enables California some of California's biggest policy wins. But the challenge lies often in delivering and ensuring that there's sufficient community based capital to efficiently move projects and businesses forward. That's where Caliap comes, into play. They do this by strengthening CDFIs, and what makes a CDFI especially important is their mission driven focus to serve underserved communities and their ability to raise and deploy creative financing. So to put simply, for every $1 of public investment, CDFIs can leverage leverage approximately $8 in private and philanthropic funding.
Redner 21
The Calip budget request is supported by a coalition of over 90 organizations, including local elected and economic development groups, and is being championed by assembly member Mark Gonzales and 18 other legislators. At a time of budget pressure, CalIP is a smart targeted investment in a system that is already working for California. Thank you so much.
Redner 22
Good afternoon, madam chair. Thank you for the accommodation. Brian Augusta with the Rural Community Assistance Corporation. We are a CDFI based in California that serves rural and tribal communities. The Caled program is a critical source of capital for us to deliver safe drinking water and infrastructure in those communities.
For all the reasons that prior speakers stated, we urge support for that recapitalization of the program in this year's budget. Thank you.
Redner 13
Good afternoon, madam chair. Ed Howard on behalf of the office of Kat Taylor. Kat Taylor, in addition to running the office of Kat Taylor, is also the cofounder of Beneficial State Bank. And she asked me to come here to reiterate her support for this incredibly important program. Essentially, CDFI's work, the Caled program works.
It is a brilliant and strategic use of state money that can extend it to the communities in California that desperately need it the most. We urge your support for the renewal of this program. Thank you very much.
Redner 25
Madam chair and members, Courtney Jensen, on behalf of the Low Income Investment Fund, a community development financial institution also providing support for CALIP. Access to childcare is essential for working families and for a functioning economy, but childcare providers often struggle to access the financing they need to expand or even sustain their operations. CALIP is critical because it allows us to finance childcare facilities, helping providers expand capacity, improve their spaces, and remain financially viable. These investments directly support working families by making it possible for parents to participate in the workforce. Without tools like CALIP, many child care providers would not be able access the capital needed to grow or continue serving their communities.
Redner 23
At a time when California is working and you, madam chair, and and, members have are working to expand access to child care, this capital is, critical to grow and continue serving communities. We respectfully urge to renew funding for CALIP to support child care providers and working families across the state. Thank you.
Redner 19
Hi. Good afternoon, madam chair and members. My name is Leslie Rodriguez, and I'm here on behalf of Housing Trust Silicon Valley. We are also a CDFI founded in 2000, whose investments have created more than 53,800 homes across 14 Bay Area counties, leveraging over 9,000,000,000 in public private investments. We've been a recipient of Cal IIP and respectfully urge your inclusion in the budget.
Thank you.
Redner 15
Hi. Hi. Good afternoon. Carol Gonzalez on behalf of Inclusive Action for the City, also an LA based CDFI whose mission is to really serve underinvested communities and build local access to capital. Really just wanna echo the comments made before me to support the investment to fund Cal IAP.
Redner 24
It'll just help them go a little bit further and support the local economies. Thank you.
Redner 1
Thank you. Alright. Now, we are closing out that item, seeing no one else approaching, and we will be moving to California Alternative Energy and Advanced Transportation Financing Authority, item number eight.
Redner 20
My name is Christina Saran. I'm the executive director for California Alternative Energy and Advanced Transportation Financing Authority, which manages the sales and use tax exclusion program, STE, for the treasurer's office. We respectfully request the approval for three additional positions to support the program's increased scope and complexity. Since the passage of SB 86, the level of effort required has expanded considerably. At at the time, the program scale and application volume were more limited, and complexity of review engagement and oversight was significantly lower than what we are experiencing today.
Redner 21
Evaluating applications from the new emerging industries technologies, including nuclear fusion in the energy and advanced manufacturing sectors and combined with recent federal policy changes has significantly increased the complexity and time required for the review process. Current resources are no longer sufficient to meet the workload demands while maintaining rigorous and demanding review standards. To address this, we proposed funding these positions through existing resources, specifically ongoing administrative fee revenue from past awardees and a re redirection of funds from current contracts. In closing, we request positions are essential in re closing, we the requested positions are essential to ensure that SDE can effectively manage its expanding responsibilities, maintain high standards of program integrity, and continue to deliver on its mission in a rapidly evolving economic and policy landscape.
Redner 9
Matthew Westbrook, Department of Finance. Here if there's any additional questions.
Redner 6
I don't have any questions. I guess just more of a comment from that I wanted to note. According to the SB 86 fiscal analysis Mhmm. I know that it was noted that these costs were to be absorbable. And this proposal is now requesting some limited resources, which weren't identified in the bill prior.
So thought that was just, important to to note as this BCP move forward. I don't know if you wanted to respond to that.
Redner 20
Yeah. No. We're not asking for additional funding. We're just asking to redirect funds to to use the we have the funding in house. We're just gonna redirect the funds to pay for the positions.
Redner 1
I don't have any comments. It has again, not you, but it has become clear. And I guess I would I would, present this question to the LAO. And this is just a macro question for this entire budget, not related to this item, but I'm asking because it brings it up, is at one point, we were talking about the budget related to new hires And not this year necessarily, but I remember for sure last year and the year before, I thought we were being presented with, in essence, it was talked about a hiring freeze. So I'm not talking about I'm just talking but about I see coming through our committee almost every proposal has new hires, and many of them are permanent.
Do we have any comments or either of you wanna speak to that?
Redner 13
follow-up with the committee in your office More information there. I don't have anything particular. Can
Redner 1
you ask the not but could you ask the governor's team? Because I thought at some point, we were instructed as a budget committee that we would be looking at very limited hiring, and and it does appear like that we have moved away. And I don't what I'm trying to get at is I know there was at least some talk that some positions weren't going to be filled, and now it seems that that so if you could check into that for us.
Redner 6
I mean, I know we've had, like, efficiency drills and vacant position elimination, so we can follow-up if that's what you're referring to. Yeah. Okay. Alright. I'll take that back
Redner 1
to you. And again, that does not infer that I do not think these are important positions, but but sometimes they feel like they're in conflict with what we're being told.
Redner 1
The higher levels. Alright. With that, do we have anybody wanting to speak on this issue? Seeing none, we will be closing that item. Thank you so much.
Thank you. That takes us to eight. Do we do this?
Redner 1
Alright. Well, thank you for another exciting moment at Budget Sub five. We look forward to seeing you very soon.
Redner 19
Thank you, madam chair. Rand Martin here on behalf of a number of public radio and television stations here in support of mister Ward's budget request. $80,000,000 total. 70,000,000 of that is divided up into two programs. One is an a stabilization fund or programs that are losing money under the federal rescission last July of more than $1,000,000,000 that went to the corporation for public broadcasting, is no longer available.
Redner 18
30,000,000 just here in the state of California. Another 10,000,000 going to an infrastructure account that would help these stations with their need to to build up their infrastructure. A lot of that for for public broadcasting, but also that a lot of that for emergency broadcasting. I have with me several stations who have traveled from all over the state to present this afternoon. I appreciate their patience.
I hope you do as well. And give the to give them a minute or so to to talk about their specific, issues. Thank you.
Redner 4
No. Thank you very much, and, it's quite a day here. I'm Chris Perris. I'm the grants director at, KQD Public Media in San Francisco. We serve the Bay Area and the state through the California report and many other programs, and we also manage the California Newsroom, which is a collaboration of all 14 NPR affiliates in the state.
Redner 25
And on behalf of our board and over 270,000 contributing members, we request support for their request championed by assembly member warden and 19 other members for public media stabilization and infrastructure funding. The 30 public media partners across the state that lost federal funding provide critical civic information services, such as what's on the ballot and where to vote, wildfire alerts and preparedness, school partnerships for early childhood literacy, arts and science programs, and much more. And we collectively reach over half of the state's residents every month. Federal cuts have led to cuts in services, and the recent ruling on the executive order you may have heard about, does not affect the $30,000,000 in annual support that had been coming to California stations. That is gone.
And note, please, that California is one of only 16 states in the country that does not provide funding directly to public media. Thank you for your consideration.
Redner 17
Good afternoon, madam chair. I'm David Lowe, president and general manager with KVIE here in Sacramento. And I'm here because congressional action last year cut federal support for public media, and that created real pressure for KVIE and stations across California. At KVIE, those federal dollars supported more than operations. They ensured that a child could access early learning resources at home, that there is fact based local journalism without a paywall, educational programming of the highest quality, and that communities could receive trusted information during emergencies.
When that funding is reduced, the impact is not theoretical. It means fewer local stories told, fewer educational resources reaching families, and less capacity to serve communities when they need reliable information most. This request is not about growth. It's about stability. It's about protecting a statewide public media system that ensures Californians, regardless of income or geography, have access to education, trusted journalism, and critical public information.
Redner 10
Federal cuts created the problem. State support can help prevent the problem from reaching the communities we serve. We respectfully ask for your support.
Redner 8
Good afternoon, chair, members. My name is Grant Charles Parks, and I'm the general manager and the executive director of Golden Valley Community Broadcasters. We function as KZFR ninety point one FM, and we are in Chico, California. We're an arts and cultural epicenter and reliable source of news and information for the counties of Butte, Sutter, Yuba, and parts of Tehama and Plumas County. We are a rural volunteer driven organization focused on educating and entertaining our community.
Redner 26
We broadcast everything from Americana to Zydeco and produce our own public affairs content covering city councils, board of supervisors, and even things that are happening right here in Sacramento. We also serve as an emergency information lifeline during wildfires and natural disasters, such as the Camp Fire, the Park Fire, the Oroville Dam Spillway, and more. We are a community service recipient from the CPB. We are as we were supposed to get about a $119,000 in the current fiscal year, which makes up for about 18 to 19% of our fiscal year budget. The CPB funds would have allowed us to strengthen and rely, strengthen the reliability and resilience of our emergency broadcast infrastructure by creating personnel and upgrading our equipment.
We planned on hiring a news director and local journalist to function as stringers for the 2526 fiscal year, but, obviously, that did not happen because of the lack of funding. So we look towards the state, our friends just ninety minutes south of us, you know, Chico, to help bridge that gap in the California Public Media Stabilization Fund. Thank you.
Redner 17
Good afternoon. Danny Kando, Kaiser on behalf of Kaiser Advocacy, representing my clients, the California Community Land Trust Network, a statewide learning and advocacy hub for community land trusts spanning, the entire state, 50 established and emerging CLTs from San Diego all the way up to Humboldt County, as well as the Cameo Network, an association of 425 small business coaching providers and lenders. Cameo and c l CAsil and the California Community Land Trust Network strongly support the $50,000,000 budget asked for the California investment and innovation program. This money is an investment in CDFIs. $1 invested leverages $8 in private investment.
Redner 27
In the small business space, the money is lent out to small firms to start and grow, creating jobs and economic activity as well as tax revenues. We urge you to renew funding for this program. Thank you.
Redner 1
Thank you. And once again, I apologize for being a little too quick on closing down the hearing. I will make a rare statement here in this committee that will have our consultant be a little nervous. I am gonna go on record of being a thousand percent in support of the public media request for dollars, as you may have seen from some of my comments throughout this committee, but also other committees. We have to have reliable news sources.
Redner 26
We have to be able to not only educate the public, whether it's emergencies, whether it's, educational issues, all of these, information that we can get out to friends and neighbors need to be reliable. We are now in competition with, social media platforms, TikTok, Instagram, all of those with a lot of individuals who have a lot to say, But until we can start basing our public information on facts, we are going to be continuing to live in a world that some of us cannot make sense of anymore. Every day, another headline with AI, all of these information that are coming at many, many individuals, and they simply don't know what to make of it. And that doesn't even include some of our very young individuals that are trying to access information. And what we used to rely on is eroding, and without a basic fundamental understanding of journalism, we are going to lose, much of what we cherish here in The United States.
Redner 1
So I, will support this, investment and knowing that under a tight budget, it will be very difficult. But on record, I wanna make that statement. Thank you, and thank you for coming to our committee.
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