Gone to Texas–why businesses are leaving California

By Jon Coupal

HJTA-150x1502Texas Governor Rick Perry is returning to California, and to left-leaning politicians in Sacramento he is about as welcome as Godzilla in Tokyo. The cause of this consternation is Perry’s pro-business record which exposes all the weaknesses of the California approach to governing. While Texas focuses on job creation, California lawmakers give their highest priority to reducing the calories in soft drinks. While Texas cut taxes last year, Sacramento is constantly searching for new ways to burden taxpayers.

For defenders of the California system, where the trivial is exalted and issues about which real people care are ignored, it gets even worse when Perry leaves. This is because so many California businesses are following him back to Texas. After comparing the two states and seeing that Texas’ taxes are lower, regulations are more reasonable and the legal system more fair, over 50 companies have relocated or expanded in Texas in the last year and a half. This business flight has shifted thousands of California jobs to the Lone texasStar State. And we are not just talking about small or insignificant businesses. Last month, oil giant Occidental Petroleum, a major presence in California for nearly a century, announced its relocation to Houston.

Ironically, apologists for California point to Texas’ unemployment rate of 6% — the national average is 6.7% — as a disadvantage to business. They suggest that California, with its 8.3 unemployment rate, is best for business because the pool of available workers is so much larger. This is like claiming that having only one hand is an advantage because you can make a pair of mittens last twice as long.

According to the Washington, D.C.-based Tax Foundation, the California business climate ranks 47th while Texas comes in at number 11. In every recent survey of CEOs, California rates at or near the bottom as a place to do business

Those who ridicule Perry for successfully poaching Golden State businesses might want to suggest to Jerry Brown that he make a similar effort in Texas. Let’s see, the governor could travel from city to city telling business leaders the advantage of relocating to California. His message: “We have Disneyland.”

Actually, in fairness to Brown, he is right that there is more venture capital in California and, indeed, one could argue that more ideas are incubated here. But for those ideas which take hold, they are more often than not realized in Texas. According to a TechAmerica Foundation report last month, Texas has now surpassed California in technology exports.

In the 19th century, those immigrating to Texas often painted “Gone to Texas” on their abandoned homes. If the California political class does not want to get a similar note from more businesses, they had better take their boot off the neck of our productive sector.

As we look forward to June and November elections, we should be asking those running for governor and the Legislature what they plan to do, not only to keep businesses and jobs in our state, but how they will work to attract new business investment that would improve the economy and put Californians back to work.

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Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

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