I love the Golden State. As Californians, we are blessed to live in a land with great weather and world-class attractions such as Hollywood, Disneyland, San Francisco, Yosemite, etc. Why would we live anywhere else?
But Texas Governor Rick Perry is betting that Californians will flee to his state. He was in California recently trying to convince local job creators to move and invest in Texas, wooing them with lower taxes and less complicated regulations. He released a radio ad criticizing California’s business climate, saying that it is “next to impossible” to build a business here but is much easier to do so in Texas. Even Governor Branstad from Iowa, calling California a “happy hunting ground”, is now making a business recruiting trip to our state.
How did our own Governor, Jerry Brown, respond? He crudely dismissed the ad, saying it was “barely a fart” and insinuated that nobody wants to live in Texas anyway. Other politicians and commentators attacked the Lone Star State by pointing out its supposed shortcomings in education and health care. There is no doubt that Texas is far from perfect but at least its people have a better chance of finding jobs there than in our state. The simple truth is that California’s unemployment rate is 9.8 percent, the second-worst in the nation and far higher than the U.S. rate of 7.8 percent. In contrast, Texas’ unemployment rate is 6.1 percent. While it is true that Texas has a higher percentage of its residents in minimum wage jobs compared to California, they have jobs and live in a state with a much lower cost of living.
California needs to encourage more job creation, but the Legislature has instead passed various mandates that have made it more difficult and expensive to do so. It is no surprise Chief Executive Magazine rated California as the worst state to do business in and why CNBC ranked us 48th among 50 states for the same reason. We are also home to the highest business income tax rate in the West, the highest sales tax in the nation, the second-highest gas tax, and the second-highest top income tax rate. We are also a haven for frivolous and unnecessary lawsuits. According to the U.S. Chamber of Commerce, we have the nation’s fourth-worst lawsuit climate.
So it should come as no surprise as to why Governor Perry is attempting to poach jobs from our state. According to the non-partisan Manhattan Institute, Texas took in the largest number of former Californians between 2000 and 2010 and received $4 billion of income formerly paid in California. That income, that is now missing in California’s economy, use to be used in our restaurants, gas stations, small businesses, service industry, etc. The lost income has a vast ripple effect throughout our state’s economic base. And still we continue to see large corporations leave as now Chevron recently announced it would move up to 800 jobs from the San Francisco Bay Area to Houston.
I do not blame Governor Perry for coming over to our state, feeling that he can successfully lure Californians away. It is time for Sacramento politicians to do some self-reflection and find out why California jobs have indeed moved away to other states. Perhaps Governor Brown should travel to Texas and woo its job creators. Lt. Governor Gavin Newsom did that last year. If he is so confident in his abilities and policies, he should have no problem convincing Texan entrepreneurs to move here and invest in our communities.
It is quite evident to me that California’s unbeatable weather is not enough to keep job creators in our state. I want our state to win the job creation game against Texas and every other state in our nation. It is time for Sacramento to re-examine its complicated taxes and regulations to ensure that people like Governor Perry will not have a case to make the next time they come here to pilfer another California business.