12/26/2011 Leave a comment
Over the e-mail transom from a regular reader:
California businesses can expect little sympathy from leadership in Sacramento.
Democratic reaction to the news that Waste Connections, a $3.6-billion company and major Sacramento-area employer, is headed to Houston to seek a friendlier business climate tells other businesses all they need to know about the attitudes of those who run California’s government.
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, gave these clueless and snarky remarks in response to the news: “In this instance you have a company that is, in fact, profitable, making significant revenue gains in 2011 and 2010. That doesn’t speak to a bad business climate here in California when a good company is able to thrive in that way. So whatever Mr. Middelstaedt’s (company CEO) reasons are to leave the great state of California, I know I’m pushing back.”
Steinberg claims to have worked on improving the state’s business climate, but from what we see in Sacramento, Steinberg and the party he helps lead have been pushing hard mainly for additional regulations and much higher taxes. The California Democratic Party’s attitude long has been that businesses are basically trying to rip off the public, and the source of all wealth and advancement can be found in the public sector, When businesses leave. Steinberg and Co. show little sympathy.
Is it really the Senate president’s role to determine the proper profit margin for a privately owned company? Talk about arrogance.
“The decision by Waste Connections to relocate, despite the 17 percent revenue increase and the $18 million cost to move to Texas, illustrates that businesses will endure short-term costs to ensure long-term prosperity,” wrote state Sen. Mimi Walters, R-Laguna Niguel, in response to Steinberg’s message. Walters quotes business-relocation expert Joe Vranich of Irvine, who notes that businesses typically save 40 percent in costs by leaving California because of lower taxes and more manageable regulations found elsewhere.
State Democratic leaders ignore the obvious. Liberal-leaning think tanks have produced studies alleging that few businesses actually leave the state. That is true on its surface, although Fox News reported that more than 2,500 employers, accounting for 109,000 jobs, have left California in the past four years.
While a limited number of businesses go through the trouble of pulling up stakes and high-tailing it to Texas, Nevada or Arizona, many others just quietly go out of business. Others keep their headquarters here, but expand their operations elsewhere. Many jobs are never created or opportunities pursued because of the punitive regulatory and tax climate in California, where Steinberg’s true constituency – the public-sector unions that enforce the myriad regulations and laws – does its work.
If California wants to improve its business climate and reduce its double-digit unemployment rate, its officials need to understand what companies such as Waste Connections are saying, rather than simply dismiss their concerns.