Perhaps because of his lifetime spent in politics, both as an elected official himself and as the son of one, once and current California Governor Jerry Brown has been focusing on the financial problems facing the government of the (once-)Golden State. In his inaugural address, he made clear he intends to confront head-on the state’s enormous budget deficit.
He doesn’t, however, seem to have much of a plan to address the state’s private sector problem, those ubiquitous empty store fronts in Southern California and the growing number of citizens out of work. It doesn’t seem to register to the Democrat that the state’s draconian environmental regulations — not to mention its high tax rate — drive jobs of the state, with many employers leaving the warmer coastal climes for the harsher weather inland.
And now, Stephen Moore reports today in the Wall Street Journal’s Political Diary (available by subscription), “Republican state legislatures and governors” are getting into the act, having are adopted “a new economic development strategy: Raid California for its jobs and businesses”:
At least three Republican governors have said as much in interviews. The idea is to offer lower taxes, a more business-friendly atmosphere and the right to be left alone from overzealous regulators. “We just keep inviting California businesses to look at the economic climate in Texas, where we treat businesses like assets not villains,” said Texas Governor Rick Perry.
California has some of the highest tax rates in the country, the worst bond rating and a multitude of nettlesome regulations. Chief Executive magazine just ranked California as the most antibusiness state in the nation. A new study by Joseph Vranich, a California-based business consultant, found that 144 major companies relocated plants, research facilities, headquarters or their entire operations out of California in 2010. That was more than triple the pace of job-creating firms leaving in 2009. Mr. Vranich said that the outmigration could become “a stampede” in 2011. “Business owners tell me every day that this is just not a hospitable place to do business anymore,” he said.
If Governor Brown really wants to rebuild California, he would focus as much on making the state more business friendly as he has been on controlling the state government’s runaway spending.
With more businesses remaining in the state, he may well find he has more revenues coming into state coffers.