California companies fleeing the Golden State

From: CNN

Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.

And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.

Companies are "disinvesting" in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.

"There is a feeling that the state is not stable," Vranich said. "Sacramento can't get its act together...and that includes the governor, legislators and regulatory agencies that are running wild."

The state has been ranked by Chief Executive magazine as the worst place to do business for seven years.

"California, once a business friendly state, continues to conduct a war on its own economy," the magazine wrote.

That is about to change, at least if Lieutenant Governor Gavin Newsom has anything to say about it. Newsom is developing a plan to address the state's economic Achilles heels, and build on its strengths. It will be unveiled at the end of July.

"California has got to get its act together when it comes to economic development and job creation," he said.
While not all companies investing elsewhere are doing so for economic reasons, some are shopping around for lower costs, lighter regulations, stable leadership and government assistance and incentives.





After 15 years in Monterey Country, Calif., Feel Golf relocated its headquarters to Florida earlier this year after it acquired Pro Line Sports, which was based in the Sunshine State.


"The whole state is a bureaucratic Santa Claus," said Lee Miller, chief executive of the golf equipment company, of his former home. "There's a very high cost of doing business."

In Florida, he found a better work pool, lower operating costs and no personal income taxes.

"Overall, it's just a better environment," he said.

PayPal opened a new customer services and operations center in Chandler, Ariz., in February, bringing 2,000 jobs to the area. The San Jose, Calif.-based tech firm, along with its parent eBay, also added 1,000 jobs in Austin, Texas, and expanded operations in Utah.

 "They have business-friendly environments," said Kathy Chui, a spokeswoman for eBay.


 Other states, which are revving up their job creation efforts in the weak economy, are making sure California firms know the advantages to doing businesses with them.


Utah, for instance, touts its stable government, balanced budget and AAA debt rating, said Todd Brightwell, vice president at the state's Economic Development Corp.

"We promote predictability," said Brightwell, whose agency features an online comparison between the states in terms of taxes, real estate costs, utility expenses, cost of living and other metrics.




Over the past 18 months, the state become much more proactive in courting California firms. It now visits there regularly to reach out to target companies. The strategy has been successful. Adobe has expanded operations in Utah, as has Electronic Arts.


California companies are also reaching out to other states. Sandra Watson, chief operating officer of the Arizona Commerce Authority, said she's seeing a growing number of California firms looking to expand outside the state.

The economic downturn has forced companies to find ways to reduce their costs, she said. Arizona is trying to capitalize on that by promoting its lower workers compensation and unemployment insurance taxes, as well as its aggressive incentive packages.

"There's a lot of competition out there and companies are re-evaluating their strategies," she said.

California, however, isn't sitting idly by. Not only is Newsom meeting with executives to hear their complaints, he's studying the best practices of other states. Earlier this year, he visited Texas, ranked #1 by Chief Executive, to learn more about its job creation efforts.

Amazon Goes Galt, Cuts Off California to Avoid Internet Tax

From: THe Other McCain

It was in February 2009 that I first compared the situation in California to Mugabe’s bankrupt kleptocracy. And the situation is only getting worse:

California Is Screwed

Californians have their head in the sand. They're broke and now pass single payer.

From: McClatchy

The national debate over health care can be summed up in a bill being debated in Sacramento.

Supporters of Senate Bill 810 say the legislation would be the only way to provide medical coverage for every Californian.

Opponents deride the measure as socialized medicine.

The California Universal Healthcare Act was introduced by Sen. Mark Leno, D-San Francisco. The bill would initiate single-payer universal health care for the state of California, Leno said. "What that means in short is Medicare for all," he said.

Supporter Keith Ensminger, a Merced resident and owner of Kramer Translations, said the largest benefit of the legislation probably would be that it would include everyone. "Everybody would have insurance, regardless of their income and regardless of their position in life," he said. "One of the bigger benefits for us is that nobody in the Central Valley would be required to remain poor for Medi-Cal. They would still have their insurance paid."

A high percentage of Central Valley residents are on Medi-Cal.

There would be other positive effects from the bill, said Ensminger, who's a member of Health Care for All, a statewide organization that helped developed the bill. It would lower the cost of insurance for most people, everybody in the state would have a health insurance plan and it would aid people in having medical conditions treated early rather than waiting.

In addition, it would prevent medical bankruptcies, he said.

Dr. Bill Skeen, executive director of the California's chapter of Physicians for a National Health Program, said the organization supports the legislation because it's the only way of providing coverage for everyone and controlling the skyrocketing costs of the health care system.

California Raises Taxes and Texas Wins

From: Gay Patriot

A newly trentagenarian reader sent me a Steven Malanga’s piece about the outflow of jobs from the (once-)Golden State:

Over the last 15 years, California ranks as the third worst state in the country in terms of job migration, with a net outflow of jobs that is 1 percent greater than the flow of jobs into the state, according to the National Establishment Time Series database. Texas, by contrast, is 10th best in the nation in that period, with a plus 1.3 percent inflow of jobs from other states. Based on Vranich’s anecdotal list, Texas is the biggest beneficiary of jobs leaving California.
. . . .
There are many reasons for the cost differences between the states, but government clearly plays a role. The chief executive of CKE Restaurants Inc., a California based owner of restaurant chains, told Bloomberg News that it takes only six weeks to get approvals to open a new eatery in Texas, but up to two years in California. Given those dynamics, is it any wonder that Texas has been generating more net jobs through start-ups and expansions than California?

Unfortunately, it seems that the incumbent governor is clueless about the impact state regulation has on those costs. As Sonicfrog reminds us, Jerry Brown recently “signed into law legislation” mandating that “33% of all power generated in California was to be renewable.” Such a benchmark, Sonic adds, can only be met with “massive energy price increases by energy providers AND massive government subsidies”.