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It’s no secret: California is not business friendly. The state that was once the 5th largest economy in the world and had more revenue coming in than even the most artful Liberal could spend, squander or steal is virtually bankrupt.
Taxes here in the “Tarnished State” (no longer can we rightfully call California “The Golden State”) are higher than most other states, regulations are onerous and the permitting process necessary to build a business here — well, let’s just say that the best laid marketing efforts of states like Nevada and Arizona couldn’t do better to coax California businesses away.
This didn’t just start yesterday. A 1993 article in Nation’s Business reports of a Southern California business that took its 68 employees and $15 million in annual sales to the neighboring Silver State and set up shop in Carson City.
The Orange County Register earlier this year highlighted a host of businesses, many with original ties to Orange County, that have permanently vacated California for a more business friendly climate. Even Apple Computer, an icon of California’s Silicon Valley, has opted to make a $1 billion expansion elsewhere.
I’ve personally spoken to business owners here in California who have partially or fully vacated California. A cheese manufacturer looking to expand to where the milk is once considered Tulare County because of the bountiful milk supply in this region of Central California. After discovering Tulare County’s double-digit energy costs — the tiered per-kilowatt hour (kWH) price of electricity at the time started at 12 cents and ran as high as 22 cents per kWH — the chairman of the board told me that the company was taking its plans and its money to the Texas panhandle, where residential electric rates were reportedly around 4 cents per kWH and commercial rates even lower.
For a more expansive posting of businesses leaving California, check out Joseph Vranich’s The Business Relocation Coach blog. It reads like a Forbes list and ought to serve as a criminal indictment of California’s inept Legislature.
A story in the Bakersfield Californian recently illustrated the greed of the politically-connected in the “Tarnished State.” The newspaper reported that one of the main utility providers here, Pacific Gas and Electric Company, or PG&E, wants to escalate its tiered system to where the highest tier users pay 40 cents per kWH. These rates must be approved by a state commission (political appointees).
Currently PG&E is the sole funding mechanism for a state ballot initiative, Proposition 16, which the energy giant claims is a pro-consumer type of initiative. It’s really nothing more than a power-grab by the public utility as it seeks to shut out municipal energy companies, which provide electricity to their customers at much reduced rates when compared to PG&E.
Meanwhile, California’s largest city — Los Angeles — is out of money, the state itself is $20 billion in the red and the state unemployment level is running well ahead of the national average. In some counties in California, the percentage of unemployed residents exceeds 40%. Some of this has to do with California’s convoluted and ridiculous environmental regulations that favor critters and non-edible plants over the food grown here. Last summer, for instance, roughly 65,000 acres of prime agricultural land was taken out of production because water that once irrigated a vast section of California’s Central Valley was confiscated by an act of Congress in order to protect a species of fish that is nothing more than bait for larger predatory fish.
To cap this tale of a broken state, in 2003 Arnold Schwarzenegger was elected in a special election after voters here fired Governor Gray Davis in a recall election. At that time voters were angry at the severe run-up of electricity rates and the common rolling brown-outs that were plaguing much of California. At the time Schwarzenegger, a Republican, said business as usual was going to change in California. Little did we realize that two terms later we were better off before we fired a governor than we are now with Conan the Incompetent.