Assembly Standing Committee on Economic Development, Growth, and Household Impact

Good afternoon. If we have your attention, please take your seats. We're going to get started in two minutes. We'll be starting in two minutes. Two minutes.

Good afternoon everyone. Dr. Patel and I are the on time caucus in Sacramento. So we start on the dot. It's two o' clock and as a quick reminder, we are live streaming this so you could follow us online.

So with that we want to welcome you to the Assembly Committee on Economic Development Growth and Household Impact Informational hearing, making sense of California's economy, Real cost pressures and household impacts facing San Diego. To ensure members of the media and the public have access to our proceedings today, please.

This hearing will be streamed in Assembly's website and members of the public can provide testimony and in person here, the California State University San Marcos Innovation Hub. To preserve the safety of everyone here and ensure the public's access to discussion, please follow the directions of our sergeants. Thank you committee members for joining me today.

Again, Dr. Patel to discuss the affordability issue here in the state. California's economy is one of the largest, most diverse in the world, playing a pivotal role in both national and global markets. Despite its economy strength, California faces significant challenges that affect its residents and businesses.

Rising costs are a major concern for California's residents, especially middle and low income households. Today we look forward to hearing from our expert witnesses and having a robust dialogue as we continue to forego through these challenges.

As a personal comment, I actually was here not too long ago as I retired from the Alumni Council, being a CSU graduate myself. So I'm very thankful for Kelsey San Marcos, our president here and the leadership for having us here.

And of course wouldn't this happen without the leadership of your local Assemblymember, Dr. Darshana Patel, who wanted to make sure that we had this hearing on this campus. This is part of our district. Dr. Patel, thank you for having us here. I know you have been a champion in so many spaces.

I get the honor to serve with you. We're both freshmen in this capacity but she's been a rock star so far. She's been raising her hand every single time to ensure that her district, the area here in San Diego have a voice. So just very honored to serve with her.

We're former BOLD School Board Members, so that's also a little extra plug that folks that have been a voice for our local education what an appropriate place to be here in higher education space. So again with that, I want to ask our committee member and our sitting Assemblymember here in District 76 for some opening remarks.

Thank you good afternoon everyone. Thank you for taking time out of your busy days to share a little bit of your afternoon with us. Thank you Chair Solache for bringing this important hearing to San Diego County. This is the first time that we've had such a hearing in San Diego and specifically in this assembly district.

Happy to be working with such a visionary chair to make sure that we bring our conversations to the community. I'm deeply grateful to our panelists for sharing your experiences and expertise with us today. Your insights will help us guide smarter, more responsive policymaking.

When we actually take the input and feedback from our community members, we can make sure we're addressing the challenges that you're facing here on the ground. And I want to extend a heartfelt thanks for those that are joining in the audience virtually and those that are here in person.

Civic engagement is the cornerstone of our democracy and the foundation of effective public policy. Your participation here today is crucial for making sure that we have the insights we need to build that effective policy. Behind every statistic about the rising cost of living is a family trying to make ends meet.

This hearing is about listening carefully, asking hard questions and using what we learn to shape policies that actually improve people's daily lives. I am proud to co host this first hearing of its kind in the district as we take this crucial step towards meaningful, community driven change.

As we all know, representation isn't just about having a seat at the table. Sometimes it's actually about bringing the table to the community and what better place to hold it than right here in San Marcos at San Marcos State University, a center for innovation, economic mobility and opportunity for our region's future.

I'm honored to welcome you all here today and look forward to the conversations ahead as we transition into panel one. I want to introduce the panel. This panel will explore how regional economic trends are impacting San Diego's innovation ecosystems with a focus on small business, R&D sectors and the talent pipeline.

Experts from academia, business and economic development will examine the forces shaping affordability right here in our region. We also will be looking at CSUSM partners to share insights on how higher education is adapting to meet evolving needs of our local employers, entrepreneurs and leading the way towards economic mobility.

Here with us today, I'd like to introduce our panel and have them join us. Here is Dr. Ellen Neufeldt, President of California State University, San Marcos. Let's give her a warm welcome. We have Dr. Carl Kemnitz, Provost, CSU San Marcos Innovation Hub. And also with us today is Eduardo Velasquez, Senior Director of Research and Development, San Diego Regional Economic Development Corporation. Welcome. Thank you for being here. Please proceed.

There we go. Good afternoon. I just want to thank you for being here at Cal State San Marcos. We are thrilled that you are here and that we're having this hearing right here at Cal State San Marcos on our campus.

You know, I think that it's just such a fitting place as this University really grew up with the community partnered in how we can innovate and bring alive the, be a partner in economic mobility.

Thank you to, a special thank you to Assemblymember Patel for bringing us here, for having us here, and for being a champion, not really just for the University, but for the people that you serve in your short time in office. I have seen it time and again and I could not be more grateful.

I also want to thank Chair Solache. It's wonderful to have you here and I invite you to come back many more times to the campus. And we're proud to be partners in California.

So just to get started and tell you a little bit about Cal State San Marcos, we were founded only 35 years ago, and as I just mentioned, we were founded as a university of place. You know, it's really about being an affordable option for students to come and really many first generation students, military.

One out of 10 of our students are military to really have the opportunity for social mobility. And we being 35 years young, we're really proud to be one of the top three fastest growing campuses in the CSU. I actually believe we're the fastest growing, but I haven't gotten the data back on that yet. So we shall see.

But either way, we are thrilled to be serving so many wonderful students, almost 17,000. And we are ranked in the top 1% in the country in advancing social mobility. And that's a really important point for us.

Not just about a ranking, but about what it means to be part of the CSU, what an important place higher education has for human beings, and what it means for our regional economy and vitality. And so when I think about that, I think about the fact that, you know, over half our students are first in their family.

So it's really important that when you're part of, whether it's Cal State San Marcos or the CSU or higher education that's affordable, we hear a lot about affordability. And, you know, 65% of our students graduate with no debt.

You know, I think about two thirds of our students right on this campus, really, through financial aid and all of that. They don't, they don't, you know, the tuition is covered, but for those that do have debt, it's around, it's less than $15,000.

So when we think about first generation, many being from lower income brackets, this is really significant. We go back to the moment right now as we're thinking about economic vitality and many ask, you know, is college worth it?

And according to Georgetown University Center on education workforce in general, a bachelor's degree adds an average of 2.8 million in a lifetime earning compared to those that do not have a bachelor's degree or have a high school diploma.

And when we think about future jobs from that study, those that offer strong wages, benefits and long term opportunity, 80% of those will require a degree or credential.

But right now I'm sitting by a partner from the San Diego EDC Economic Development Corporation and I'm going to hope not to steal any thunder, but I can't help but mention how we partner and you know, their study on inclusive economic growth has projected that our region must double the number of post secondary education completions by 2030, adding 20,000 workers annually with a degree or certificate to sustain the local economy.

One of the things about Cal State San Marcos that's part of CSU and so important in the higher education ecosystem is that must bring in people that haven't been represented in higher education education before.

And that I think is really telling that we must, when we think about social mobility, we must open higher education to make sure that it is for all of the people and that people have access to it, they can afford it and that they can graduate.

And that is very important to us here at Cal State San Marcos. We know that the benefits are far beyond just wages, that there is a quality of life, of financial well being and better health.

But even more so or in addition to really it's about not just the individual, but what it does for the regional economy and that quality of life and the workforce that's so important here. And 8 out of 10 of our graduates tell us they stay in the region.

We are of the region and so we serve our region. We know that that for us, just like many CSUs, our region is southwest Riverside through San Diego County, making sure that those folks have access to higher education and that they know they have a University here. I don't just speak for Cal State San Marcos.

This is part of the ethos of Cal State and that's really that powerful return on impact. But another piece of, you know, that has come as we talk about affordability and what cost of living is housing is so important and making sure that our students and we're 35 years young.

So I always say we right now, of our 17,000 students, we house 2,200. We really only have 1,800 beds. So it's quite miraculous. But that happens through our, through our, our partnership with our city and actually North City right here as the developers right on campus. That helps find places and spaces for us.

But I'd be remiss if I didn't thank you and all of your colleagues for the affordable housing program because next year, fall, we will open 550 new beds thanks to the state affordable and two thirds affordable housing thanks to the innovation of what you've done done lawmakers, State of California.

And I've never been in any state that has done that. It shows the commitment and what that means. And it means more students who haven't always had opportunities can go to school. I want to give you just a few examples of some of the innovative things we're doing around workforce and the trajectory.

One, I also want to say thank you because the integrated science and engineering building, I just got an email, they're building a fence. I want them to put that shovel in the ground. It is coming up and we're going to have that groundbreaking this month.

But the thing that's so key about that building is we're a University that isn't fully built. And in partnership with Viasat, we started an engineering program. 30% of our software engineers are veterans, over 50% Hispanic, in the nation, that average is around 15%. And even throughout the State of California, that average is maybe 25%.

Over half of our students in engineering right now are Hispanic. This will allow us to go from about 300 engineering majors to about 2,000. And for every software engineering graduate we graduate, there's four jobs waiting. For every electrical engineering graduate, there's three. So this is very important to the workforce and local industry really helped us get this program off the ground.

It's also about partnerships, as I think about Palomar College just down the road and the amazing leader there that I partner with, Star Rivera-Lacey. You know, we at CSUSM, we produce, we are the fourth largest producer of nursing in the State of California. And a part of that is that we're innovative in the way that we do it. You can come in as a freshman, you can have a second bachelor's.

But one of the pieces that's really innovative, important with that partnership with Palomar and other community colleges is we go from, we do a concurrent program with the ADN and the BSN at the same time, shorter time to degree. It's happening at the same time in partnership, innovative partnership with Palomar.

You know that's not the community college partnerships are important, but the K12 system is equally important. And we have so many MOUs with different school districts, 28 local school districts and tribal partners to be exact. And that is so important to make sure that we're starting with students literally in the third grade.

And those school buses pull up right under my office window. So I see it three times a day, school buses come through on the tours to make sure that people know that this is a place for them.

One other really innovative workforce program around this and really starting and moving forward with dual enrollment is a three year program. It's called SWIFT, the Scholars in Wellness and Innovation Fast Track. And the thing that's really key about that program is we start with the dual enrollment.

We have three area, three area high school districts right now that we're partnering with, and when they come out of high school, they've got that college credit and in three years with internships, which are so important that experiential learning and all of those and three years they have their degree.

But what's even more important about this wellness degree is it's in the mental health fields that the community said they desperately need. The piece of that that also is key here in innovative is that it's embedded with certification certificates.

So those students instead of graduating and being ready to make $30,000 a year, are ready to make $80,000 a year. The other piece of that is it takes some of the strain off social workers and people at the master's level. We just don't have enough mental health care workers and we've got to be innovative.

And this is one of those innovative examples around workforce and need that is so important to our economy. This is a picture is up there where I got to go and welcome students to Cal State San Marcos along with their principal and school board members.

And at Buena Vista Unified, we gave out sweatshirts on a 95 degree September day and they put them on. I couldn't believe it. I thought they'd carry those home, but those sweatshirts went right on. And I look forward to welcoming those students to Cal State San Marcos on the campus when they come forward.

But I think the real key here as I talk about there's so many programs, whether it's how we are partnering with dual enrollment to make sure you can earn a degree faster or where we are to make sure that you know that pathway is for you and it's more seamless.

We know that we grew up with this region and that it's our job to serve the economy, the workforce and to make sure more people have access to that.

Now I get to the great privilege of inviting a college of mine, Dr. Carl Kemnitz, who's our Provost and Vice President for Academic Affairs, to share a bit of an or an overview of the Innovation Hub in Affinity Lab that we are literally sitting in.

Thank you President Neufeldt. The Innovation Hub where we're currently sitting is where cross sector collaboration thrives. It brings together students, faculty, K12 partners and regional industry to solve real world problems from sustainability challenges to product development.

We host quick pitch competitions for budding entrepreneurs to get their ideas funded and social innovation challenge where our students solve real world problems as well as a resilient entrepreneurs program, a pathway out of poverty for the entrepreneurs from our communities, low income communities that surround us.

The Infinity Lab, which is right upstairs in this building, is a cutting edge laboratory and biotech incubator designed for research and creative problem solving. Each startup that rents space in the lab is required to involve our students as assistants, interns or with other learning and research opportunities.

That was an important part of launching that is making sure that it intersects the innovation economy with our student learning and the campus. One of our partners is currently conducting clinical trials on cancer treatments as well as treatment for infectious diseases.

Together, these spaces and our programs reflect our commitment to inclusive innovation and to growing a local talent pipeline that's job ready, diverse and future focused. At CSUSM, workforce development is embedded into our mission of social mobility. It's also embedded in our curriculum and throughout the student life cycle.

One of the things that sets us apart is how we work closely with employers across the region when we develop new academic degree programs or review continuing ones to ensure that they are aligned with both current and emerging industry needs.

That includes integrating career connected learning opportunities such as internships, apprenticeships, industry led project experiences into every student's academic journey. For example, through our College of Business Administration senior experience, our students work extensively with sponsoring business organizations and mount a trade show to showcase their work to local business leaders.

This summer we announced a new partnership with Southwestern College to expand access to four year degrees in San Diego's South County region. These pathways include high demand programs in business Administration, computer information systems and cybersecurity, programs chosen with intention, guided by data from the city's 2023 workforce and education needs assessment and in collaboration with local employers.

We're proud to build on the success of meeting students where they are, exemplified by our long standing partnership with Mount San Jacinto College in Temecula. The work we've done together in Southwest Riverside County demonstrates what's possible when institutions collaborate to expand access and opportunity, just as we are doing now in South San Diego County.

We also partner with Camp Pendleton to provide instruction on base in areas such as cyber security and renewable energy. 1 in 10 as the president has mentioned, 1 in 10 of our students are military affiliated and that's the highest in the CSU.

In the past three years alone, CSUSM has launched new programs in areas like engineering, public health, supply chain management and environmental science based directly on feedback from our industry advisory boards. And we've prioritized non degree pathways through workforce certificates that meets Californians where they are especially working adults.

In short, we're not only preparing students for the jobs of today, we're equipping them with the adaptable skills and mindsets to lead the economy of tomorrow. We appreciate the State Assembly's recognition of how public higher education contributes to California's economic strength, and we welcome the opportunity to keep partnering in this important work. I'd now like to hand it off to my colleague from the regional EDC. Thank you.

Thank you, Carl. And thank you to the assembly members for being here today, really appreciate you being in our region. So I'm representing the San Diego Regional Economic Development Corporation. And just so you're aware, we're a privately funded economic development nonprofit and we serve the entire San Diego County area.

And as Dr. Neufeld alluded to, we are keenly focused on making sure that as our economy grows, it is also increasing opportunity and access to everyone across our region, all corners of our economy, promoting inclusion, not just growth.

The main thing that we do is try to support businesses that already exist in our county and help them identify solutions to any roadblocks that they may be facing and try to increase the chances that their growth and expansion happens here in our region. And as you know, San Diego is a powerhouse of innovation.

It's a leading economy not only in the state, but across the country and the globe. We have epicenters around innovation and technology, the largest concentration of military assets in the world. But we're also a binational cross border economy that deeply fuels our growth and innovation.

As well as one of California's most globally connected regions, our economy is also fueled by world class universities, a highly skilled workforce and those binational ties that I mentioned. But we're also facing real headwinds in terms of economic growth and opportunity going forward.

And so I want to share a little bit about our current landscape, the strengths that we have, the diversity of our economy, but also some of the headwinds that our region is facing which are not necessarily unique to San Diego, but certainly have unique elements to them and some areas of opportunity for collaboration with the state, certainly in the context of the state's economic blueprint and the California Jobs first initiative.

So as a data and research guy, I'm going to hit you with a lot of facts, a lot of stats, so bear with me. But I do want to highlight some of the key sectors in our region. Some of the key industries in our region.

Aerospace and defense is obviously a big piece of our history and our technological innovation. We are one of the largest destinations for Department of Defense contracts. Over $27 billion in the last fiscal year came into our region. Major naval and aerospace installations and increasing investment in technologies like autonomous vehicles, whether they're submarine or aeronautical.

Cybersecurity and AI applications continue to be developed and explored in our region. A lot of opportunity for collaboration with the state around the priorities of building out the space economy and, you know, defense and resiliency here in San Diego. Life sciences is obviously one of our key clusters.

One of our main points of pride in terms of growth and innovation in San Diego, we have more than 60,000 jobs tied to that industry alone. You can pick any metric you want. San Diego consistently comes out as a top three market for life sciences innovation. Thank you.

We're also a global leader in genomics, diagnostics and MRNA technology and therapeutics. One area that we see continued support from the state and opportunity to collaborate is around the R and D tax credit. We hear a lot of interest in that.

But also accelerating site approvals for biomanufacturing through some of the CEQA streamlining that's being announced and promoted is another area for collaboration. High tech and emerging technology is obviously another area of great importance as the world continues to digitize and the demand for semiconductors and wireless technologies continues to increase.

We have a lot of history and innovation there with Qualcomm, Viasat, other companies like that, but also AMSL, which is one of the leading suppliers to the entire semiconductor value chain. One of their biggest operations is here in San Diego County. We're also investing in fusion technology here in San Diego with the D3D reactor.

The General Atomics operates here, a top five destination for venture capital funding, which is an area where San Diego does punch above its weight in many respects. $1.2 billion for technology venture capital came into San Diego in 2024 alone.

A lot of opportunity there, I think, for the state to engage, especially around providing matching funds to help attract DOE spending and investment as it relates to the construction of a pilot fusion plant. Clean energy obviously is an important facet of California's climate adaptation goals and energy resiliency for the country as a whole.

Just outside of San Diego, County, east and Imperial, we have the Salton Sea and the largest lithium deposit in the world, and so continue to invest in that value chain around not just extracting the lithium, but also producing the battery technology that comes with that rapid growth in clean mobility, energy storage and the like.

And then the last thing I want to mention in terms of our regional assets is advanced manufacturing. I think when we think about manufacturing, we don't always think about California, we don't always think about San Diego. But San Diego actually has been for a long time a leading market in terms of advanced manufacturing.

Before the pandemic hit, San Diego's manufacturing job growth outpaced both the state and the nation. We've seen some of that retreat in recent years as some of the federal investments have encouraged relocation of those operations outside of the region and outside of the state. But nonetheless, we have more than 240,000 manufacturing jobs in San Diego.

From anything from medical devices to satellite equipment. It represents 10% of the private workforce here, private sector workforce in San Diego. And obviously a big asset and facet of our manufacturing capabilities is the binational economy and the relationship with Baja California.

So expanding manufacturing incentives and technical assistance for small manufacturing companies in particular, especially in these high value sectors and anything that we can do to continue to invest in and accelerate that binational transportation and connectivity. In terms of the headwinds that the region is facing, that, you know, puts all of these amazing assets at risk.

Again, some of these are not unique to our region, but nonetheless they're having in some cases disparate impacts in San Diego. Obviously federal budget cuts to science and research is impacting everything from that basic research and innovation and the trajectory of the therapeutics and solutions for the world.

But just the just the proposed cuts in indirect rates for research in the region could potentially have a $500 million economic pain impact into our region. So, all of these cuts threaten our economy in multiple ways. We are a small business region. 98% of our companies in San Diego employ fewer than 100 people collectively.

That's almost 60% of the workforce, which is double the national average. So small businesses matter in San Diego more than they, than they matter in other parts of the country. And there's still a lot of fragility and instability in our small businesses who struggle to compete for talent and contracts and opportunities.

There's a lot of uncertainty around trade and cross border logistics, which obviously we would look to the state for support there. Grid resiliency, permitting delays also impact the speed to operation, the time to delivery. We hear from companies that time to market is more important than any financial incentive that can be provided.

And then obviously something that I know you all want to hear about and care deeply about and cross sects, all of these things is housing affordability.

And the way that impacts business growth and expansion is even though we have these innovative companies and strong industries that offer high paying jobs, the number one challenge that employers cite to us is talent attraction and retention. It's very hard to keep people in a region that is consistently one of the most expensive to live in.

One of the rankings that we're not very excited about is having the second highest median home price among major metros in the country. Only one in nine households can currently afford to purchase and live in the median priced home. And that's a trend that continues to move in the wrong direction.

So in conclusion, I just want to highlight again areas where I think our region would want to partner with the state and has, you know, formally submitted some of these ideas through the Jobs First programming and the activation plans that were recently submitted back to the state.

Stabilizing and growing research investment to certainly offset some of the impacts that we're anticipating and already feeling from the federal retreat. Supporting cross border trade and mobility and the advanced manufacturing capabilities and assets that we already have.

Obviously driving housing affordability to support the retention and attraction of talent investing and partnering with local universities to strengthen that local talent pipeline to make sure that the people that grow up here are the same people that are equipped to fill the roles of today and tomorrow and then continuing to fuel and drive that resilience and growth within our small businesses because those are critical to the economic growth of our region.

With that, I'll pause and again, thank you very much for your time.

Thank you, Mr. Velazquez, and thank you to the panelists. I'll let Dr. Patel ask the first question, but I have to just share something real quick. I'm a visual learner by trade.

And so the moment I landed in San Diego this morning, to driving through downtown, driving to your campus and everything I was shared today, it's a reminder of how much our economy in California has an impact not only here in Southern California and San Diego, but throughout our state.

And that's why I think we're very excited to kick off this we call it oocketbook tour here in Southern California. And we want to try Southern California. But all the data you shared literally is a reminder of the things we do. We just approved a $300 billion budget in the State of California.

And to me, the values that we have as Californians and the fact that we protected as an example, the CSU and higher education is a reminder that our voices matter in the State of California. You have champions like David Alvarez, your other Assembly Member in San Diego. Right. That's really big in education.

And he also chairs the group, the California Mexico Binational Group. Right. Because to your point of the deal that you shared, it has an impact. But going back to education and why we're here at the CSU campus, we fought so hard to protect because the Governor had proposed to cut 8% of higher education in our budget. Right.

And so of course, a lot of us are just higher education champions. But you just highlighted why the investments that we make in these campuses have an impact on local campus.

As a CSU graduate myself, we, they have very different issues at Dominguez Hills that you just mentioned with our veteran community and other communities here in San Marcos. And I think it's just a reminder of the work that we have to continue supporting.

And so just thank you all for really amplifying those examples of how what you're doing here regionally has an impact so that when we have to make decisions of cutting or not cutting state resources, these are the reminders of why it's working and why things like housing here is going to have an impact for your community and.

And having the opportunity for our students and our population here to have that access. Right? It's not just affordability, but it's access as well. Sorry, I just. I'm a visual learner and I just, you just kind of compiled everything you said to what, just driving to the campus as a reminder. But Dr. Patel.

Yeah, thank you. You three panelists have set up the hope and the challenges quite well. And I think we're here to listen to some of these ideas. I do have some specific questions.

First of all, we know that in the San Diego region, we have several higher institutions of learning that are doing similar work to what we're doing here at San Marcos. Right? With innovation centers and hubs, are these seen as competitive or collaborative? Complementary? And how is that?

How are we pulling them together to make sure we're meeting all the needs of the sectors that we have? Impressed to know, Mr. Velazquez, that the San Diego region, I didn't know this before, can boast being one of the top regions in almost every single sector. I've always felt that.

But to know it factually is really comforting and also brings me hope that we can do it here in San Diego. So can you speak to a little bit about what the other universities, higher institutions of learning, have offered and how they can work together?

You know, one of the things. First of all, thank you for that important question, and I just need to pause and thank you for your advocacy on behalf of the budget in state higher education. We felt it. I felt it from my colleagues across San Diego and beyond. We are grateful.

I just want to put that out there. The thing that I have really appreciated since I've come to the San Diego region is that higher education works as an ecosystem. From the way I work together with President, colleagues all across the way in which we partner. And the innovation centers are no different.

Getting together, sharing ideas, working together. So one of the things, you know, and sometimes we're highlighting different pieces or areas as we move forward. When we opened this center.

It was, you know, it's not that that was a new idea, but one of the things that we really put as a hallmark of this center was social innovation trying to come in as we were working with our faculty to see, to complement so much of what's out there.

I don't know if my colleague here has anything else to add.

Sure. So we work, for instance, with organizations that serve people in need. And one of them is, is Terry, just up the street, which serves a range of folks and some on the spectrum and they work with those groups and they call them the need knowers. And they're the ones that know where innovation needs are.

And our campus then works with them in order to solve some of those problems and put them out in the public sphere. It's not to make necessarily the economy tick, to make people's lives better. So that's where this an example of the social innovation that we do here on the campus.

And just to piggyback off of that, I think when we look at how we expand the table and how many chairs we have around the table, we can really solve some of the intractable problems that we're experiencing in our communities.

If we bring more perspectives to the table and some of these challenges that folks in the community are experiencing, they may be blind spots for the people who typically sit at the table. And they may not understand that there's not only this need but this economic opportunity. Frankly, there's incentives on multiple sides.

Not just making people's lives easier, which is the most noble cause, but that it's an investment that's worthwhile and worth putting resources towards. Especially as we look at across public education systems, it's not redundant, it's complementary and synergistic actually.

If I might just add one more piece to that, I think, and I know this happens across California, I happen to be in the San Diego region. I think it is a model of that when talking about the education from the K12 education sector through the community colleges and the four year.

But also, you know, as we work together across universities in the region, to your point about the complementary and where we can partner, whether that's with grants, innovation across the board, that's the key. It's not about a zero sum game or some big competition. We know our niche, we complement San Diego state's niche or USD's niche.

And I think as we look at these tough economic times right now, we're going to lean on public private partnerships more than ever. Government can't do everything and even in good economic times, government can't do everything.

So as we expand the economic opportunities for our programs, looking at social mobility to strengthen economy, we're going to lean on private industry more than ever.

To Mr. Velazquez, what would you, if we could identify some of the top policy areas that you could ask us to take back to Sacramento, how can we help stimulate that and make sure that it's enduring to not only help our small business owners and not only help our local communities, but really push innovation and stabilize our budget so we're not relying on the top 1% all the time?

Yeah, I appreciate the question. And yes, we have a lot of input and feedback from the private industry, obviously along those lines. I would say generally speaking, the overarching theme that we hear across industry, across our region is finding ways to reduce barriers to get development and projects online.

So permitting is a consistent pain point for businesses whether they're trying to build a new laboratory, a manufacturing site, what have you. So I would encourage the state to explore areas where it can partner with local government in particular to identify.

It's not even regulatory burden, but reporting and processing that adds to the to the time and complexity by which a company is then spending resources and delaying the operational commencement of their projects and delivering services and goods to the economy. That is consistently the issue that we hear the most.

So if there's opportunities to develop regulatory sandboxes where we might experiment with some of these modifications and changes to processes to see if we can get delivery of facilities and economic engines more quickly without creating unintended consequences and spillover effects, I think that would be a very positive and welcome opportunity to experiment and test and then see what can be scaled and augmented and built upon.

But that is, I think, probably first and foremost where I would start.

I appreciate the permitting part that you're giving us because I actually come from local government myself and sat on South Coast Committee for two years and that in itself was a long experience. It felt like 20 years, even though it was two years. But the permitting part that we have a state problem with permitting.

And so I think that sandbox idea that you're mentioning, I think it's great feedback for us because we need to figure out how to combat that. Right? I mean, in South Coast, for example, we have permits that have been there for years, not months, but years. And how do you even function that way? Right?

So I think that's a good impact for us to, or input, I'm sorry, for us to take back and see how do we how do we create that part of addressing that issue? Because it is a permit issue as well. Well, I want to thank the panelists.

We have a second panel, but I want to thank you all for your time. Of course, we're not going to solve all of California's problems with one discussion, but of course your feedback, your constant involvement through your different roles are critical to how we get to govern.

And please, besides today's discussion, feel free to always contact us and our offices, we have great teams in our district office and obviously our Sacramento office. So, looking forward to continuing our discussions. Thank you. And I know the President and the Provost are here.

I want to also acknowledge that we have the Chief of Staff of the student government office. I'm a big student government geek, so I just want to acknowledge Ileana Carmona. She's here in the audience, so I just want to, she's the chief of staff to the student government office, so want to give her acknowledgment too.

With that, it's my distinct honor to present the next panel. As someone that besides my government hat that I had as a local mayor and all the hats that we wear in local government, I actually had a day job and I ran a chamber of commerce. That was my day job.

Why I'm this is this conversation is so important to me. Our economic development, what's happening at the state level. I come from supporting and working with small businesses in the City of Lakewood. I did it for seven years before coming to the Legislature.

So, I say that because the next panel we're going to hear for some good discussion. So with that I want to welcome our next panelist. They want to go up to the podium and to the sit. It's Jason Pagal, President and CEO of Asian Business Association San Diego.

We have seven Divison Principal of AMAI and then Dr. Debbie Chen, founder and CEO of Hydras. Thank you all for joining us. This panel elevates the voices of small business owners, community innovators and university affiliated leaders working at the intersection of economic pressure and regional resilience.

Again, I personally we're excited to have this discussion and I just want to welcome you guys here today. Thank you for being here. Dr. Patel and I were very excited when we saw the final list of our panelists. So take it away and please. We'll start with Dr. Chen.

Thank you so much for this time. My name is Dr. Chen and I'm founder.

Let me start. There we go. Thank you for this opportunity to be here today. My name is Dr. Debbie Chen and I'm the founder and CEO of Hydrostasis. We're a Series a company headquartered in San Diego. We're building hydration monitoring wearables. I'm wearing my product today.

I'm here to tell you about my mission, my founder journey, and highlighting the incredible ecosystem in San Diego, as well as some of the work that has yet to be done. So a little background on why I'm doing what I'm doing. 75% of the US adults are chronically dehydrated.

About 10 million seniors are hospitalized due to dehydration each year. And just a 2% decrease in weight due to dehydration can significantly impact your cognitive function. 87 million people in the US suffer from conditions that make it difficult to receive proper hydration, such as dementia, kidney disease, diabetes and heart failure.

Currently in the clinic, we're using skin turgor or just pinching the skin or urine color or weights or swollen ankles to determine proper hydration. So we really need a better way. I started this journey in 2017 as I was trying to optimize my own hydration as an athlete and then again experiencing low blood pressure during my pregnancies.

I wanted to buy this product, but it didn't exist. So I put my PhD to work and I started tinkering with this idea. But I was an academic scientist with no business background. So I was eventually introduced to San Diego Networks supporting women business owners. People like Felina Hansen at Harahub and Dr. Sylvia Ma at SBDC.

Dr. Ma became a close mentor and then an angel investor and then a dear friend. She's also the founder of the Stella Foundation, which is a nonprofit that supports women founders and women investors. And I went through their accelerator program that then I met other investors and other mentors.

Eventually made it as a finalist at the first ever San Diego Angel Conference in 2019. And I've since received grants from the SBDC for marketing, connected with the California Manufacturing Network, and many, many amazing mentors that made it all possible.

My journey has come with some incredible challenges that a woman of color faces, especially as a hardware tech founder. In the past five years, only about 2% of venture capital goes to women founded companies. While women led companies consistently outperform male founded companies by 63% on return of investment.

This is a missed economic opportunity that has not been properly addressed. Of those receiving venture funding, only about 2 to 3% raise more than $1.0 million and less than 10% of US patents are owned by women.

Over the past seven years, Hydrostasis has received three issued US patents, completed a Freedom to Operate published in Europe and China, and we've launched and sold out of our first product, the Gecko Watch in 2024, focused on serving older adults.

We've also received close to 500,000 in non dilutive funding from the NIH, US Air Force, UC San Diego, among other foundations, and about 5 million in private investments. Most people would call me a success story and frankly, so would I, because I've never imagined I'd get this far bringing a product from an idea to market.

I've learned so much and met so many amazing people, but I can't help but wonder how much faster, how much farther I could have and still go in growing my team in building our products if I had more access to capital or if I didn't have to waste my time answering biased questions from investors about who's taking care of my kids or if I'm even working full time.

I do know that I owe my success to my support network, the incredible people and organizations in San Diego like the SBDC that have supported me from day one. And my hope is that you and your loved ones see our hydration monitoring technology in the clinic and in your smartwatch.

And I hope that with the work that we're doing, we're equipping the next generation with the knowledge for a healthier and longer life through hydration. These days I'm giving back. I'm giving back to the community by sitting on the board of Stella Foundation, mentoring new founders and supporting small businesses in San Diego.

I hope that my story inspires you to continue to invest in women businesses, women owned businesses and organizations like the SBDC and Stella foundation that support so many founders like me. Thank you.

I'm going to just make a quick comment. I've always told people our small businesses are what makes California thrive. I know there's a lot that goes on in our state. We think we're important as the elected officials, but really our small businesses are. And you're just an exact example of that greatness that we have in our state.

So I just wanted to acknowledge your greatness and thank you for being here.

Hi, my name is Sven Davison. I'm co-founder and COO of Amai Inc.

We make edible cups. We take brewer spent grain. We make that a shelf stable substance. We turn that into a flour. We also take oats from oat milk production and Pea starch from pea protein production that gets put into our edible cup which can hold boiling water. It doesn't leak for 72 hours.

You can freeze it, you can cook with it, you can microwave in it. It doesn't change its properties for three days. I mean well when you do that. And we have different flavors, different sizes. Right now we're R and D facility in Vista. Story on how we basically started is I'm a 20 year entertainment Executive.

I worked at 20th Century Fox, Sony and Paramount. I met my wife and the CEO and owner of Amai. During that time she was General manager at Panasonic, overseeing manufacturing for blu rays and DVDs. We didn't want our son raised in the entertainment world.

Especially when he came home and was comparing his shoes and fashion at like 3 years old and wanting to know why we weren't, you know, buying him more fashionable shoes. We felt like he should get out of that system. Came down here to be six blocks away from my in laws. It's been a wonderful community down here.

But changing careers was interesting for us and we wanted to do something that was better for the environment and would challenge the ideas behind food waste and behind, you know, just conventional trash. So we discovered a company in Bulgaria in 2020 that does make an edible cup.

But as soon as we became their sole importers we found out there were three things that we could improve. One, it was actually made from virgin grain. So we felt like we should introduce the upcycled portion of that. Two, the packaging was not sustainable, it was not recyclable. So we felt like that we should change that too.

And then third is we felt like the carbon footprint importing it from Bulgaria was kind of strange, wasn't really. It was kind of anti message. So we pitched them this idea. We offered to license the technology and they decided no, they just wanted us to be a distributor.

So my wife went off and figured out how to do this a better way and filed a patent which was issued to us just back here in May. And we began a little R and D facility here in Vista. Long story.

We at first we're going to build a facility here in Vista, but you know, the capital output for that was rather large. So we started looking at co-manufacturers. Meanwhile we were creating a machine or at least we're looking at a machine at a place called Bueller. They're a huge industrial baking facility, baking machines in Austria.

That was a little bit time consuming to do that. So one of our board of advisors had a lot of connections at Foxconn and he had set up all the manufacturing for iPads and iPhones. And he actually said if Foxconn could do this for us. And we actually have a co-license with Foxconn to create this machine.

And now I fast forward to where we are today. We were about to bring this machine in in the spring, but the tariff situation, at least in April, created 210% tariff on the machine because tariffs are stackable. So right now the tariff in China is 40%. Then it's a 50% anything made from steel and aluminum.

There's also a tariff on baking products right now which is a 25%. You're at 115%. So to bring this machine in did not make any sense. So we pivoted in April originally because we have patents and we have a licensing model.

We had always wanted to prove the model here in Southern California, then license this again, the carbon footprint, license these facilities from, you know, rescuing spent grain or actually any local substance. We found out other ways to make the cups with other local types of sources and licenses in other places.

So because of the tariffs we are now actually looking at, we've actually reversed the model and we are talking with about four different countries right now to land the machine there. The machine's done. It works at 95% capacity. We, you know, it's.

Anyway, we're quite happy with the product that Foxconn made for us, but we're kind of stuck right now in a rock and a hard place. So all of that said when we moved down here from California. Sorry, Los Angeles. I know. Anyway, we ran into Innovate 78 Connect startup San Diego SBDC. They've been fantastic for us.

They found us accountants, lawyers to help us with capital raise. Actually Bobby Adelman helped us with a feasibility study, you know, we got for free, which was actually a glowing report on our entire business model. We got connected with Climate California Climate Tech and we got a loan approved, you know, for 80% to $5 million.

We, we've had fantastic network of help here and I can't imagine us doing it without any of these sources. So it was vital to our entire path to getting here.

Thank you Mr. Jameson, for sharing that. Of course. You just highlighted why we love the SBDC and the work that they do throughout our State of California.

And of course, we won't be discussing tariffs today, but you're the evidence of why this conversation needs to be had or is being had in Sacramento as well, because it's not impacting our small businesses. And then our State of California. So thank you for sharing. Next. We have. I think we have. Yeah. Jason. Mr. Pacal, welcome.

Chair Solache, Assemblymember Patel. Thank you for the opportunity to speak today and for your leadership on this Committee. My name is Jason Paguio and I serve as the President and CEO of the Asian Business Association of San Diego which advocates for the interests of over 30,000 Asian and Pacific Islander owned businesses in our region.

We are part of the San Diego and Imperial Small Business Development Center Network providing no cost technical assistance to any small business seeking support. We received funding from the SBA and SBTAP.

I also have the fortune to serve as the Governor's appointee and Chair of the California Commission on Asian Pacific Islander American affairs where I lead the Economic Equity Committee. And I'm happy to say that Senator Patel was one of our former colleagues at Good Fortune for us to get elected.

Unfortunate for us to lose you on the Committee, but happy to see you carry those policies on in committees like this as well. So I'm honored to share insights from the ground, particularly from small business owners working with working families and immigrant communities, navigating today's cost of living in the Seneca region.

And so this study that I'll quickly go over and then some solutions.

But as a regional overview, while this overview is for all small businesses in our region, I do want to highlight that a study we produced with API data showed that API small businesses in the San Diego region represent more than $5 billion in economic impact, which has resulted in about 90,000 jobs.

So statewide, API businesses have an economic impact of over $200 billion. That is one third of all Asian businesses in the nation. I mean, simply put, a more inclusive and equitable economy is better for all Californians, something I know you advocate for quite frequently.

So now for all small business firms, the study was produced for all small businesses in the Seneca, Canada region. Not all of it is very glowing, but it is a good snapshot in time for us. Nearly 4 in 10 local businesses are either considering or actively planning to relocate.

Relocation is even higher for Asian businesses, which is about 51% actively are considering to move. And black businesses was about 44%. Confidence in business viability is lower year over year. Only 13% report confidence staying afloat in San Diego, down from a stronger position last year.

Some of the confidence and particularly weak with firms with about $75,000 or less in household income. The rising relocation intent appears to be tied to spikes from wage mandates and trade uncertainty, as we've heard and I know you heard earlier from the EDC and others that hiring remains the number one constraint.

58% of businesses can't find qualified employees. 55% say developing talent is also a major challenge. And high growth sectors like logistics, healthcare and services are under the most amount of pressure. Businesses cite permitting delays and inconsistent program delivery as top frustrations.

Public training programs are not scaling fast enough to meet the demands of of our economy and public training programs are not scaling fast enough in terms of being able to make sure that we have in terms of average time to fill skilled roles. Businesses are aware of support programs but aren't engaging with them.

And the gap stems from complexity, unclear outcomes and quite frankly right now a lot of poor timing. This is some of the information regarding some of our language service gaps you've seen in the County of San Diego. Among one of the largest gaps is language.

Culturally competent programs making sure that they're all tailored for our different communities, which I know we do a lot of within the SPDC network. And some of this you heard earlier. So I'll move a little bit quicker through this. But much of which you know, we've seen.

Simply put, if Senegal wants to grow, we have to first stop the loss. Retention is the new growth and making sure that we have. We're not only having a good and trained workforce, but that workforce remains and stays within our region. We've heard from CSU San Marcos that many of their students want to stay here.

You know, obviously affordability and housing cost of living is so expensive and we want to make sure that we're able to keep them here. And part of that is the talent and the workforce that we're able to hopefully keep here in our region.

Especially with our world class education system that we have here and some of the statewide solutions I think that we could explore and looking at California Compete's tax credit and small business technical assistance program have been effective, but the reach remains uneven, especially for micro businesses, immigrant owned firms and unincorporated areas of the county.

However, with the recent Committee amendments earlier this week which increase outreach capacity for TAP, we're hopeful that this positivity affects the outreach efficacy of that program. One example that is working is local partnerships like procurement, our procurement accelerator which helped increase the number of Asian and Latino owned businesses certified to contract with the government.

But those programs are limited in scale and funding. Conversely, business owners that tell us navigating state and local relief programs is often a little too complex, a little slow and to disconnect it from the actual need, which is I believe for us to be able to engage with our local operators is super helpful.

So with that I only have three specific recommendations of this Committee that we could partner with you on, the first of which is Streamline and Expand Technical Assistance Fund the one time budget change proposal request the Chairman has proposed to support businesses affected by disasters this year as well as AB265 authored by some Member Caloza and authored by yourself Chairman, the Small Business and Nonprofit Recovery act which is a California SBDC-sponsored bill.

So thank you for your leadership on that. We know that can be transformative specifically to San Diego during the wildfires, not just in La. We had the floods more recently. Those bills help all Californians so thank you for that. Second is back a Regional Cost of Living adjustment or E COLA index.

State eligibility thresholds for assistance programs should reflect San Diego's true cost of living, not a one size fits all statewide formula. A regional COLA would better support working families just above the federal poverty line but are far below financial security.

And the third is support Small Business Affordability Zones, pilot programs that provide targeted relief such as rent stabilization, tax credits or childcare subsidies in high cost high displacement neighborhoods. Prioritizing business continuity for legacy and culturally significant businesses.

With that Chair Slash and some Member Patel, thank you for your commitment and your leadership to understanding our region and our economic terrain. This is a moment that demands bold creative solutions which I know you're providing to us. So thank you so much for that.

Not just to help families survive but to help our communities stay and thrive. Thanks for your time.

Thank you Mr. Paguio for that input. I love the opportunity to always get input on any bills or things that we're actually doing in Sacramento. So I appreciate that specific feedback. Yeah, we definitely have bills that are obviously hopefully going to make some real impact in Californians.

But with that I was actually intrigued by one and I'll just dive into for a quick question. You mentioned the zones. Can you elaborate more on that because I was intrigued by that part of.

Your yeah we saw some of this particularly throughout the pandemic where you know as we see a lot of the federal funding for block grants going away, whether they're promised zones or folks haven't been able to utilize opportunity zones. We have 52 in the Senegal region.

Being able to have more specific I think areas where we're looking at maybe was designating for incentives or where we're helping a lot of small businesses. We saw that in the Convoy Penn Age and Cultural District. While it's not a designated zone, particularly as a Promise Zone.

There was a lot of high cultural and language assistance needs in that region, but because there were no residences based on the census, had made it difficult for us to create certain policies.

So local funding, whether it was a CARES act or arpa, we were able to get with the local policymakers to make sure that we could have those language be a little bit more flexible in terms of how we were able to action incentives or support for those small businesses.

So I think just opening up the toolbox a lot more to make sure that we have certain policies that are a little less General and a lot more prescriptive towards certain regions of zip codes could help us. But it also requires a little bit more data, which obviously we'll do what we can to help support that.

I know Senator Patel has done quite a bit to make sure that we have a more complete data to make sure we're addressing a lot of those needs.

Chairman, Got it. Thank you for that.

And that kind of leads into one of my questions that I had, which is, you know, as your local experience in business and the work you're doing, what policy changes possibly or support mechanisms could be that we could possibly look at in the State Legislature that could help, you know, with the San Diego local economy thrive more.

So is there something that, you know, obviously we heard in the last panel, the permitting process. Right. In the State of California, but are there any policy changes or support mechanisms that we could help address at the state level through legislation or through obviously funding?

I know that funding is always an easy one to do because it's just give us more money and we'll do something. But are there any actual policies that you see that we could address as legislators? And so we would like to see if there's anything that you would want to give us any feedback on that.

I've already mentioned the funding piece, but specifically there are organizations that are already doing the hard work. Right. And so it's not about just throwing money at it, but it's also just distributing the funding to the people that are already on the ground.

So organizations like we both mentioned, SBDC and specifically I sit on the board of Stella foundation, who specifically is putting education surrounding women founders and women investors and sort of creating that community.

The other thing too is I have to give thanks to Cal State San Marcos is actually there was a grant last year that helped me bring in two interns, which I then were so amazing. I kept them on as part time and then now one of them is full time.

And so these types of, you know, I think it was the City of San Diego, plus Cal State San Marcos. And they came in at no cost to me, you know, the business owner, to bring in these amazing folks. And eventually, because they were so amazing, I did not want to lose them. Right?

And so then jobs were created. So these types of funding avenues, again, it's not throwing money, but it's like these avenues that are already established but are really helping the folks doing the work.

Great, thank you for that. I'll let Dr. Patel ask the next question, but I want to highlight also internships, right? We have students here. I have, I think I have my sixth intern in my office in the last six months. We all, as student leaders, did internships.

So I want to echo that to anyone in the audience and watching that give our youth opportunity to intern. Let them explore the work that you're doing, you know, every day. And it just helps us just expand our horizons.

I always tell people I love my local community, but go live a little, go learn a little more elsewhere, right? Because you have to explore what's out there. I remember as a young going to Westwood, right to the west side, I live in the southeast part of Los Angeles.

I was like, these are beautiful homes, These are beautiful people have nice cars, right? But it just expands your horizon what you can. So it's almost like that part of dreaming and what can be possible, you know? And your story is great too. And your story. So with that, Dr. Patel.

Yes. Thank you all for presenting your experiences, especially for the two business entrepreneurs. Dr. Chen, I have to say what you experienced is similar to what we experience in so many different sectors. I heard the same things when I decided to put my hat in the ring to run for the state level office.

People ask me, well, who's going to manage your household? And you know, we have these conversations. But the reality is, as I said before, when you bring different perspectives to the table, you're able to innovate in new spaces and in new ways and really unlock economic potential that might not have been there before.

And for Mr. Paggio, I want to ask again and reiterate. There is absolutely a need to do targeted interventions and make sure that we are able to unlock the potential of our economy. When we look at certain sectors, there are people hungry to put their innovations, their ideas, their solutions out there. They just don't know how.

And they may not have access, even culturally or economically or regionally, to the services and supports that they need. And the work that the SBDC does is invaluable in our Communities. And I can't share enough how when we look at starting a business.

My father was a civil engineer, but ultimately he made his success in a small business. And sometimes it's important to do that for your own family, but also for society. So there's a big push in this region around equity and opportunity from procurement to multilingual outreach.

What do you think other cities or regions are doing that could inform how we could do it better? Maybe it's not just here in California, but maybe it's in other parts of the United States or globally.

Have you seen any policy or maybe not policy ideas, just incentive ideas that are working that we could adopt here in California for our local communities.

One on that somebody can tell. Similar to the AB 2019 with the equity and procurement bill, seeing the waterfall from that.

We had recently Supervisor Montgomery Stepp adopt a policy for equity and procurement in the region mimicking the 25% procurement goals for the state, which the state has exceeded all their goals since implementation of that bill and working with their technical assistance providers.

As you alluded to, we have over 100 business advisors within the SPDC network and of those specialties and everybody else associated with that, those are people who are in the community every single day working with their businesses to make sure they could do all that work.

And as economy and we're dealing with the tariffs and a lot of uncertainty and policies that are maybe unfamiliar to a lot of folks. The place we could turn to we believe is really local government, but some of that comes from leadership from the state.

So our ability to work with the Board of Supervisors in the county and their few $1.0 billion in spend in our community, having to mimic a bill, but having the mechanisms in place for outreach but be able to provide the technical assistance and buying power, I think being able to mimic some of those bills and implement them in our local regions, whether it's the county or local municipalities, I think could give us that opportunity to make sure the money stays within our local communities.

Thank you for that. I think we. I've got time to ask one more question. Mr. Davison, when you were going through all of your challenges of finding out how to manufacture, you pivoted over and over and over again to make sure you could bring this wonderful product to market.

I'm just impressed at the tenacity that your business is able to experience in order to really do this cutting edge work. We are all looking for ways to make our planet more livable. Right. For the long term.

How have you leveraged creative partnerships internationally and do you have any advice for people who are trying to navigate this space of rising costs of importing goods, tariffs, etc. Do you have any advice for people out there navigating similar spaces to you?

Reach out to SBDC and talk to Bobby Adelman, because Bobby has some amazing connections worldwide. We've been fortunate at least to have enough people on our board to connect us with local people. Actually, the brink. We've also had, you know, connections to Mexico.

I mean, it's all these resources have actually been through the local resources that we have here. And that's how we've been able to make these contacts and how we've been able to talk with them. So if we have these resources down here, please use them and we hope we'll continue having them.

I will just jump in real quick and talk about funding again because, you know, we got approved for that Climatech award, which is 80% of 5 million, but it turned out that after Silicon Valley national bank failed, all the banks kind of backed off on that.

So that backing, we couldn't actually get a loan based on that unless we had, you know, basically a standard loan, enough equity, enough revenue. And of course, being an R and D facility, you know, we didn't have those things.

So we still have that guarantee, but we haven't been able to use it with any bank without enough MOUs and Lois, which we are working on right now.

But so I'm just saying that if there's some way to kind of unlock that and stop that kind of paranoia, that everything kind of closed down after SBB failed, that would help a lot of entrepreneurs a lot.

Yeah. So in some ways we do need some regulations and oversight, and in other ways, we need to look at being more strategic about winding down some providing regulatory relief. So it's that constant balance. Right, Right. We want to be strategic. Thank you for your thoughts and insights and just sharing how helpful SBDC has been.

I have not been that familiar with it, so this has been very insightful and supportive for my learning and I appreciate you sharing those stories. Thank you.

And one thing to panelists for doing a great job today. We're going to go into one more thing, which is a public comment. This is technically a public hearing, so we have to have public comment.

So with that, I'm going to ask that for those of you who wish to speak, please form a line here to my right, to your left, and approach the microphone one at a time. Each person will have maximum of 2 minutes per comment. If there's any comment today.

So if there's any comment, this is the time that we're. And you can stay there for now. We're going to acknowledge any public comment at this point. If there isn't, that's fine too. Just want to make sure we did acknowledge it.

You do know how to reach us for future reference.

And if there's no public comment today, we do want to thank the public for being here. We do have one brave soul. Okay, Mr. Hernandez.

Thank you. So, Juan Carlos Hernandez, I'm the President and CEO of California Southern Small Business Development Corporation. We are a financial development corporation. We work with the infrastructure bank, I Bank to manage the Small Business Loan Guarantee Program.

I do want to say that, you know, Dr. Chang, you made a very, a very valuable comment with regards to access to affordable capital. And that really is one of the biggest challenges for small business owners. We've been doing this now for 3536 years with the state.

I do want to say that from last fiscal year, the State of California received approximately $366 million in request to guarantee of loans. Of that, one third of that, $130,000 came out of our office here in San Diego because of the fact that we were specifically targeting guaranteeing small businesses.

And that really is the true, as everyone says, that's the true lifeline of California. And that's part of the biggest challenges is the small businesses. The deals that come in for, for $100,000 or less in capital, those are the most difficult ones to obtain.

So those are the ones that we have actually specialized in to work with several CDFIs, mission lenders, as well as local community banks to be able to provide them with true affordable access to capital. Because there's plenty of lenders out there, but many of them are charging 405060%.

You now have this new cash, you know, this cash advance program with Merchant Cash advance that if you do the math, and I've done the math, it comes out to about 110 interest rate, about 110% interest rate, if you really do the math on an APR level.

So it's really important now the partnership that we have both with ABA as well as with the SBDC. I know, I saw Danny here. It's really important because of the fact that, that it provides us access to more lenders that really provide that access to capital to small businesses.

And I for one, am extremely happy to be partnering with them. So Assembly solace. Dr. Patel, thank you so much for everything that you're doing to kind of champion more and more to provide services for small businesses. So thank you.

Thank you, Mr. Hernandez. With that, we thank the public for the public comment. As we wrap up, I really want to express my heartfelt gratitude to all of us here today and the stakeholders who have been instrumental in making this hearing a success.

Your valuable insights and expertise will undoubtedly play a significant role in informing the Legislature and guiding our future actions. I cannot say thank you enough to my colleague Patel. She has been nothing but a champion in these conversations. We get to sit together in these conversations.

We get to dialogue and have really good discussions about what tonight, how do we become an impact and having that local perspective. So your conversations with her directly, when I go to my district and have those conversations, they're really critical for us to continue to govern and have that local perspective.

Because I always tell people, as a local, former local mayor, I cannot forget our local communities because that's who I represent. We each represent about half a million people, and we can't forget our communities that who sent us to Sacramento to be that voice. With that.

I'm going to ask Dr. Patel to make some closing remarks, and then we're going to close it off.

Yeah. Thank you. Once again, thank you to the audience who is here with us in person, as well as virtually as well as to all of our panelists. I know it was a brief conversation, but it was a very important one to have you all here with us today.

We are working hard every single day to make sure we can deliver for Californians. And we recognize that when we go to Sacramento, we're leaving behind in our communities and people who are struggling to get by, people who are excited to try new things.

And we have to take those two aspects of our community and tie it together and find a way to make things better for all of us. That is our task. We are here to make lives better. I want a stronger local economy. I want a strong California economy.

I want to build a state where people can raise children and have their children have children here in California. I want a state where when we invest in children in their public education, they could turn around and give back to our local economy by having their careers and building their lives here.

And I think what that means is we need to talk to our local communities. It all comes from the foundation of where we came out of. So thank you for being here.

I can't say enough how much it matters that you feel comfortable to share your time with us, to share your ideas with us, to be vulnerable with us, to share your challenges and your hopes for the future. We're going to take that with us. We're very serious. My colleague here, Chair Silache, he knows how hard I work.

He knows how much I care about my community and how much I want to make sure California continues to be a place where people can find their dreams. Let me know anytime. I have a wonderful staff here in the local district. I am happy to engage. I do believe in fostering constituents.

If you're not finding what you need from your Assembly Member, come to us. We will find a way to make things happen. In the same way that you sometimes need different perspectives or you sometimes need a different approach. We all have different strengths that we bring with us to the Legislature.

Mine is really listening to the community and pushing, pushing really hard. So thank you for being here and hope that we can work together for years to come.

Thank you, Dr. Patel. And she is so busy. She can't even make time to have lunch with me when I'm in Sacramento. I'm such a foodie. I love to eat. I'm like, come on Dr. Patel, let's go have some lunch. Go take a break. But no, she's been a great partner.

So with that, a last thank you again to San Marcos for hosting us. I'm a little biased because I'm the chair of the CSU delegation, so I love our 23 campuses and so we're going to continue being a fighters for our campus.

But thank you to the President and to the students and for us to have us here in your home. With that, we we're excited to continue the conversations and thank you all for your time and contributions. This hearing is officially adjourned at 3:19 pm. Thank you.