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Alice Khosravy: California is at bottom for business

Posted: February 22, 2013 2:00 a.m.
Updated: February 22, 2013 2:00 a.m.

Just a few short days ago the lanterns fell, bringing an end to Chinese New Year season for 2013.

During the recent festivities, I happened to hear a young girl quoting passages from Tao Te Ching. One of those she chose to recite was “Ruling a large country is like cooking a small fish. Too much handling will spoil it.”

It was a poignant reminder of how universal truths remain — no matter the age, culture, ethnic group or geographical location. Try as you may, you can run but you cannot hide from these truths.

Neither can you hide from the economic laws of unintended consequences. If you don’t believe this, go ask Gov. Jerry Brown.

Gov. Brown spent nearly two years campaigning for higher taxes and more regulation on businesses in California. He packaged his message well and to his credit, the voters gave him everything he wanted.

Business owners, however, are taking a different view. A recent poll released by the California Business Roundtable showed more than two-thirds of California business leaders see the state as an extraordinarily difficult state in which to operate.

On Feb. 1 the Sacramento Bee reported additional results of the study, which found that of the 1,142 leaders of both large and small businesses polled, “more than 60 percent see the state’s economy as worse than the nation’s as a whole and 69 percent say it is harder to do business in California than in other states.”

Gov. Brown’s recent public dustup with Texas Gov. Perry highlights the fact that many states see the Golden State as a Golden Opportunity to grow their employment and tax base by luring businesses with more business-friendly environments.

Although Gov. Perry’s trip got the most attention, California has also been targeted by Arizona, Nevada, South Dakota, and most recently Iowa.

According to KWQC of the Quad Cities, Iowa, Gov. Terry Branstad arrived in California Feb. 19 to begin courting business leaders who “already have a presence in Iowa, as well as those he’d like to attract.”

It is too early for hard numbers regarding the effectiveness of the campaigns waged by the out-of-state governors, but early indicators do not look promising for California.

KCRA in Sacramento reported on Feb. 18 it has confirmed more than two dozen companies that have committed to leaving California for the Phoenix area.

Among those moving jobs from California to Arizona are Chevron (800 jobs) and Waste Connections (over 100 jobs).

The article by Mike Luery cited backlash from Proposition 30 and a desire to escape “excessive regulations and the threat of really ridiculous lawsuits” as the major factors that influenced business leaders’ decision to relocate.

Gov. Brown, I respectfully submit that the first step in rehabilitating our state’s inhospitable business climate is to admit we have a problem. If California was a great place to run a company and employ people, we would not be ranked as the worst state to do business the eighth year in a row by CEO Magazine.

If California was a great place to run a company and employ people, we would not be ranked 48th out of 50 in the State Business Climate Tax Index published by The Tax Foundation.

If California was a great place to run a company and employ people, we would not be ranked by the Small Business & Entrepreneurship Council as dead last for policy friendliness, with key negatives for high taxes, high workers compensation costs and high electricity costs.

If California was a great place to run a company and employ people, we would not be experiencing multiple years of population loss as people must leave the state to find work elsewhere.

Instead of engaging in public spectacles with governors of other states, who are simply working on behalf of the people of their state, I implore you to work on behalf of the people of California. The only way California will recover is to create a business-friendly environment that provides a vibrant and diverse employment base. The talent to revitalize the business climate in California is currently at your disposal, but it will not wait forever.

Gov. Brown, please admit California has a problem with our business climate and take tangible steps to create an environment that will reduce the burden of regulation and cost of running a business in this state.

Until we take this step, the list of states recruiting California businesses will continue to grow.

Alice Khosravy is a resident of the Santa Clarita Valley. “Right Here, Right Now” runs Fridays in The Signal.


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