In many ways the national and international economic system is unhealthy and not sustainable. For example, our consumption of resources far exceeds the capacity of the natural resource base to regenerate itself and we are rapidly depleting the stock of non-renewable resources. We only have from 40-75 years worth of easily recoverable petroleum reserves left.1 The economic cost of this is being ignored and must be considered if we are to live in ways that are sustainable. Much of our manufacturing is based upon throwaway products and polluting manufacturing processes. Our nation continues to spend enormous amounts of money for automobiles and roadways and allocates limited funds for more "appropriate" transportation systems.2 Advertising promotes over consumption, and much of the focus of our economy is on sales and consumption rather than on meeting basic needs and providing well-being and basic services. More and more of our nation's wealth is controlled by fewer and fewer of its citizens3 while an increasing number of people are either single working parents or both parents work at least 40 hours a week. The result is that often parents do not have enough time to spend with their children or to participate in the community, while the number of families living in poverty continues to rise.4 [See Social justice chapter)

The local Santa Cruz County (SCC) economy shares the problems of the national and international situation. In addition, we are affected by a high cost of doing business, a reputation for being anti-growth and anti-business, and a very restrictive permit process, The County's unemployment rate continues to be above the state and national levels.5 Proposition 13 and subsequent funding decisions provide government with less "sustainable" sources of revenue. Though air quality has improved and meets the US EPA standards, we have not met state ozone and particulate matter standards, and traffic is increasingly congested .6 Business decisions tend to favor short-term economic decisions at the expense of our long-term prosperity.

The County has chosen to remain somewhat selective, choosing to attract environmentally and socially sensitive enterprises. This requires a stable base of local employment - preferably manufacturing, science and engineering education, and agriculture, based on the existing local economy and the educational level of the workforce. While retail commerce creates short-term revenue through increased sales taxes and jobs, it does not provide long-term economic health. Only by providing stable, full-time employment will the County be able to satisfy the goals of quality of life and sustainability outlined in the document. For example, only through these improvements to the local employment market can the County begin to reverse the current problem of the large numbers of daily commuters over Highway 17.7

The County has many characteristics that make it an ideal place to create a sustainable economy. These include a local surface water supply, limited access via road, and the desire to preserve irreplaceable natural resources. Environmental and health awareness and response of our citizens is very high. Local recycling efforts are well under way.8 Small, locally owned and operated businesses predominate.9 The County is home to a number of firms that are engaged in new and more sustainable technologies and scientific processes. There is a relatively high level of community involvement. Businesses, and their organizations, provide leadership and participate in the local community.

The challenge at the present time is the need to preserve and strengthen a local and sustainable economy while reducing unemployment and maintaining adequate revenues for support services. Set within the context of a national economy comprised of large and non-sustainable corporations, this challenge requires creative thinking and a faith in our own collective vision of a desirable future for our community. We believe this document to be one essential piece of that necessary vision.

II. Desired State

A viable economy for Santa Cruz County for the 21st Century is based on the vision that:

A. The People of Santa Cruz County will be able to live in a satisfying and fulfilling way. We will be free from hunger, have an affordable place to live in a safe county, have jobs that provide livable wages and enrichment, have time to pursue interests other than work, enjoy clean air and water, and have affordable health care. An educational system that values sustainability, encourages creative thinking about issues and options, and provides for job training and personal growth.

B. Environmental planning and management aimed at achieving or exceeding environmental sustainability is critical to improving quality of life. Consumption of energy and natural resources will be brought into balance commensurate with their availability. Activities that continue to damage ecosystems and habitats win be curtailed so that the damage can be reversed. Prices for such things as timber, agricultural products, and energy will rise to reflect and include the full costs of their use, while the resultant costs to remedy the damage from present irresponsible practices will diminish as time goes on. New environmentally friendly practices and products will result in lower long term economic costs. In other words, sustainable business practices will be far more cost effective and efficient than non-sustainable practices over the medium and long term.

C. A viable economy is critical to improving quality of life. These three factors - quality of life, environmental sustainability, and a healthy economy - will need to be maintained in a very delicate balance. If not, we are mortgaging the future for short-term satisfaction. A healthy, sustainable economy will be dependent upon a major shift to the acquisition of goods and services supplied by local businesses. These businesses will be at least partially operated and/or owned by their employees, and will be incorporating sustainable principles such as reduce (use of natural resources), reuse (finished products), and recycle (products into other uses). These principles will be considered at the time products are designed. Industries, such as agriculture and timber, will reverse the principle that it is profitable to reduce staffing by substituting the use of more natural resources. Revision to the tax structure will be a prime tactic for promoting a viable and sustainable economy.

III. Goals for the Year 2000

A. Create jobs to reduce unemployment by one-third from current levels (from 9.1% to 6%).

B. Increase the number of sustainable businesses* by 5 percent per year.

C. Increase the number of local businesses by 1.4 - 2.2% per year to about 20% by 2000 (including telecommuting and sole proprietorship).

D. Lobby state and federal governments to implement tax structure incentives that strongly encourage new and existing businesses to be sustainable.

E. Encourage business management practices and decision-making processes to reflect increased employee participation and/or ownership.

IV. What Has Been Done

A. The County and City of Santa Cruz have developed strategies and plans that address the issue of economic development. The documents that best describe these strategies and plans are the General Plans for the city and county, Measure C which designates the 1990s as the "Decade of the Environment," and the Committee for Economic Vitality's June 1996 Overall Economic Development Program Report. These plans appear to be well-thought out and move in the right direction. For example, based on Measure C, the County Code, Chapter 16.90, directs the County government to work towards promoting and encouraging economic development strategies which are consistent with both environmental protection and restoration, and which help create a local economy based on the use of renewable resources. However, given that we are now more than halfway through the 1990s, the planning process and implementation strategies need to be reassessed. Further, there has not been sufficient emphasis placed upon the need for sustainability. Consider the April 5, 1993 Measure C Annual Progress Report: There is an entire page of economic development activities, but only two (a study to identify manufacturing uses for recyclable materials and the production of the "Buy Recycled Guide") emphasize sustainability. The 1995 Baseline Update Report focuses on the County's economic development strategy, again commenting only on recycled materials in regard to sustainability. The goals and suggested actions in this report emphasize items not covered in the City/County documents and do not repeat all the recommendations in those reports.

B. The Sustainable Quality Awards (SQA) program provided a positive incentive to the business community in 1994 & 1995 with an awards ceremony highlighting small, medium, & large businesses, as well as non-profit organizations, government agencies, and educational institutions that demonstrated quality and sustainable practices. Through the awards process, the SQA evaluates and builds awareness of outstanding achievements in environmental stewardship, social responsibility, and sustainable economic development. SQA was cosponsored by the American Society of Quality Control (ASQC Monterey Chapter), the Santa Cruz County Chambers of Commerce, the County and City Governments of Santa Cruz, as well as ACTION-SCC.

C. Through the community assessment process in 1995 & '96, a series of 82 Quality of Life Indicators in 5 areas (health, education, economy, social environment, and public safety) were defined to serve as benchmarks to measure the issues that people feel impact the quality of their lives. There is an annual re-evaluation and update. [See United Way, Section VI.]

V. Suggested Actions for Further Progress

A. Quality of life related:

1. Define and prioritize public services needed to achieve quality of life goals.
2. Local groups continue to define and expand sustainable quality of life goals and establish the funding needed to provide as many of these services as possible.
3. Business associations and consumer groups should educate and empower consumers to realize their own economic power; to "vote with their dollars."
4. Establish models of consumption to show long-term reductions in consumption needed to achieve sustainability and reverse damage to ecosystems and habitats.
5. Participate in the Monterey Bay Sustainable 21st Century initiative, promoting our region as a model of sustainable development, sustainable business and lifestyle practices.

B. Economy related:

1. Partnerships should be established among business, education, and government to provide funding and expertise to public service activities and avoid large increases in the size of local government.
2. Local banks, government agencies and non-profit groups could develop and provide increased investment funds to new businesses that plan for sustainability and/or to develop sustainable products, processes, technologies, and services. This is to augment or replace outside venture capital funding, currently the only available funding source.
3. Develop means to provide technical assistance and disseminate information regarding business plan development, marketing, operation, management, accessing working capital, and sustainable business practices. Work with the Central Coast Small Business Development Center (SBDC) and others, including SCORE.
4. Sponsor community forums to promote and reach consensus on goals and means of economic sustainability, including possibilities for investment and funding opportunities.
5. Encourage businesses to create employee/management teams to develop plans to implement sustainable practices.
6. Consider increasing taxes on non-sustainable business practices and use revenues to provide tax breaks and other assistance to banks and/or other investment programs which provide capitol to local, sustainable businesses.
7. Encourage all businesses to participate in the Sustainable Quality Award (SQA) program, when it is available, or to apply for recognition through Renew America's National Awards for Environmental Sustainability (NAES). SQA program will maintain a list of businesses, schools, government programs and non-profit organizations that meet minimum requirements for improved "sustainability." [See SQA program, Section VI.]
8. Local Development Agencies could develop community support for a Hotel and Conference Center that includes a primary focus on community sustainability and related areas. Work with the Conference and Visitor's Council to promote Santa Cruz as a conference, visitor, and film destination with a strong focus on ecotourism, health & personal growth, and community sustainability. This center should be located and planned to encourage sustainable transportation, with much of the access to the center by mass transportation, foot, or bicycle travel. The center should be designed to use renewable energy sources.
9. Explore new ways of encouraging the local exchange of goods and services, such as through the Barter Connection (408) 426-5978, which has been in operation since 1986 in the county.
10. Study tax structure incentives done elsewhere and make further recommendations beyond this document.

C. Environment related:

1. Increase gas taxes and commensurably decrease sales taxes on basic necessities to discourage automobile traffic. Support the shift through public education - that we currently subsidize the price of gasoline, and would like to provide a break-even to the consumer (no net penalty) while shifting the incentives.
2. Eliminate or reduce ordinances that require businesses to provide parking at a rate that encourages use of alternative transportation modes.
3. Phase out the use of public subsidies for automobile parking, and promote Transportation Demand Management such as carpooling, cycling, free transit passes, etc. [See Trans. chptr.)
4. Provide tax rebates on recycled products and surcharge on "non-green" products.
5. Provide tax incentives to organic agriculture and disincentives to chemical-based agriculture to compensate for the costs of damage to ecosystems.
6. Change zoning laws to create organic agriculture zones to protect fragile areas from chemical agriculture (e.g., near schools, riparian zones).
7. Provides tax incentives for development and purchase of environmentally sustainable products and services, such as recyclable or biodegradable packaging,
8. Develop an incubator for promoting economically-sustainable "re use" and recycling centers.
9. Find ways to support industries that use kenaf for paper, commercial hemp, & other renewable resources.

D. In regard to County Policy:

1. Amend the viable economy section of Measure C (Decade for the Environment Referendum) according to this document.
2. Amend the Economic Development Strategy Document as follows:

a. On page 5, four criteria are listed for projects to be given special status. We recommend that "sustainability" be a requirement for any project.

b. On page 7, the list in the second paragraph should be expanded to include the County Office of Education, Cabrillo College, the Santa Cruz Technology Alliance, and ACTION Santa Cruz County.

c. On page 8, there should be a clear policy statement that emphasizes the retention of businesses that are willing to move toward sustainability.

d. On page 10, add an action to be proactive by researching retail needs, seek entrepreneurs that can fill these needs, and provide start-up incentives.

e. On page 13, the second action, we should consult with the South Shore Bank of Chicago. They are an outstanding success model for providing capital to those who cannot secure traditional financing.

f. On page 14, the emphasis for a new conference center should be related to education, the environment, and high-tech.

g. On page 17, we should promote Santa Cruz as the organic fanning capital of the world, and we should promote industries related to home gardening, such as Shepherd's Seeds.

VI. Useful Resources & References

Documents referred to above:

• "City of Santa Cruz, GENERAL PLAN - 1990-2005" - City Hall, 809 Center St., Santa Cruz, CA 95060-3864; Tel: (408) 429-3550.
• "County of Santa Cruz Economic Development Strategy," 1994 - Private Industry Council, Committee on Economic Vitality (see 'local agencies' below).
• "County of Santa Cruz, General Plan" - Planning Dept, County Gov't Center 4th floor, 701 Ocean St., Santa Cruz, CA 95060-4069; Tel: (408) 454-2200.
• "Decade of the Environment Referendum, Santa Cruz County Measure C," 1990 - Planning Dept, County Govt. Center, (see address above). Also see: "Measure C Annual Progress Reports" - Diane Gerbrandt, coordinator of annual updates, 454-3402.
• "Agenda 21," esp. chapters 2,3,4, & 30, United Nations Conf. on Environment & Development, June, 1992. - May be ordered from UN Sales, Rm. DC2-0853, New York, NY 10017; Tel: (212) 963-8302 or (800) 253-9646; also available on EcoNet: en.unced.documents (Then type o for old) (Nest type: i for index and s to search for a particular article/document);

Local organizations & agencies:

• Association of Monterey Bay Area Governments (AMBAG), P.O. Box 809, Marina, CA 93933; Nick Papadakis, Exec., Dir.; Tel: (408) 883-3750; Fax: 883-3755.
• Barter Connection, Sue Williams, Dir., 1414 Soquel Ave., Ste. 102, Santa Cruz, CA 95062; Tel: (408) 426-5978.
• Business for Social Responsibility, 609 Mission St., 2nd floor, San Francisco, CA 94105; Tel: (408) 537-0888.
• County of Santa Cruz Economic Development, Susan Pearlman, Coordinator, County Administrative Office, 70 J. Ocean St., Rm. 520, Santa Cruz, CA 95060-4069; Tel: (408) 454-2100; Fax: 454-3262. Also: Private Industry Council, Committee on Economic Vitality (citizen's advisory group on econ. development. matters).
• Democratic Management Services, 500 Chestnut, Ste. 250, Santa Cruz, CA 95060; Bill Tyssling, Director, Tel: (408) 425-7478; Fax: 425-0830.
• Planning Department for the City of Capitola, 420 Capitola Ave., Capitola, CA 95010; Kathleen Malloy, Dir., Tel: (408) 475-7300.
• Planning Department for the City of Scotts Valley, One Civic Center Drive, Scotts Valley, CA 95066; Tel: (408) 438-2324, Laura Kuhn, Director.
• Redevelopment Agency for the City of Santa Cruz, 323 Church St., Santa Cruz, CA 95060; Ceil Cirillo, Dir., Tel: (408) 429-3045.
• United Way, P.O. Box 1458, Capitola, CA 95010; Mary Lou Goeke, Dir., Tel: (408) 479-5466; Fax: 479-5477.
• Watsonville Housing & Economic Development Agency, P.O. Box 50000, Watsonville, CA 95076; Tel: (408) 728-6014, Ted Madonia, Director.

Model programs referenced:

• National Awards for Environmental Sustainability, c/o Renew America, 1400 Sixteenth St. N.W., Ste. 710, Washington, DC 20036; Tel: (800)922-RENEW; Web: solstice.crest.org/renew-america
• Santa Monica Sustainable City Project - SQA Program, Daniel Ehrler, CEO, Santa Monica Chamber of Commerce, 501 Colorado Ave., #150, Santa Monica, CA 90401; Tel: (310) 393-9825, ext. 11.
• Sustainable Quality Awards (SQA) Program, P.O. Box 548, Santa Cruz, CA 95061; Tel: (408) 454-0400 or (800)962-GREEN, Daniel Robin, Dir.; Email: sbqa@cruzio.com; Web: "www.ecoquality.com/sqa"

Documentation Sources:

1. Worldwatch Institute, Paper #66,1985. According to the World Energy Conference & U.N. Statistical office, "We have only 40 years worth of proven oil reserves left!"

2. "1996 Highway Statistics," Federal Highway Administration. [Of approximately $100M in highway revenue, less than $6M was allocated to mass transit.]

3. "Who Killed the Middle Class" by John Cassidy, The New Yorker, October 16,1995.

4. "Who's Poor" by Cheryl Russell, American Demographics journal March 1996.

5. "1995 California Statistical Abstract" by Dept. of Finance shows 9.1% rate for Santa Cruz County and 7.8% for Calif. "Economic Indicators" by Council of Economic Advisors shows 5.6% for U.S.

6. "Yearly Counts, 1996" by Santa Cruz County Regional Transportation Commission

7. Santa Cruz County Regional Transportation Commission: 27,000 people commute "over the hill" every day.

8. Refer to Resources & Recycling chapter, Section IV.

9. "88% of the local businesses have fewer than 20 employees" - HRA Rpt. to Board of Supervisors, Mar 5, 1996; County of S.C. Economic Development Strategy, '94; & Measure C Baseline Environmental Conditions of SCC, 1990.

* "Sustainable Businesses" are defined as exhibiting sustainable practices in the following ways:

- nonpolluting

- protects resource base (minimizes use of non-renewable resources and raw materials)

- responsible for products from beginning to end of their life cycle.

- ethical social policy

Contributors: Chairperson Alan Schlenger, Daniel Robin, Rob Wheeler, Micah Posner, Daniel Ehrler, Bill Tyssling, Randolph Morgan, Bob Schwarz, Charlie Reid, Alan Brady, Dan de Grassi, Cecile NEUS, Gary Harrold, Michael Shaw, Dan Doxtator, Paul Johnson, Joan Brady, Ron Wolf, Glenn Smith, Carl Blanke, Will Hull, Dave Skinner, Hina Pendle, Stephanie Hoffman, Tom Ghiglia, Chase Price, Rick Longinotto, Pat Arnold, Patrick Greer, Sylvia Caras, Lynne (Basehore) Cooper, Mike Bauer, Jeff Ringold, Chris Schneiter, Susan Pearlman, & Nick Papadakis.