Shocker: California Businesses Voting With their Feet and Leaving the State

Posted Posted in California, California Economy, Gavin Newsom
The $5 Million a Year San Francisco Tax Break

Twitter notwithstanding, California for many years has not been business friendly and now the businesses are giving up and simply either leaving or expanding in other states.

Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State.

And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison.

Companies are “disinvesting” in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California.

“There is a feeling that the state is not stable,” Vranich said. “Sacramento can’t get its act together…and that includes the governor, legislators and regulatory agencies that are running wild.”

The state has been ranked by Chief Executive magazine as the worst place to do business for seven years.

“California, once a business friendly state, continues to conduct a war on its own economy,” the magazine wrote.

That is about to change, at least if Lieutenant Governor Gavin Newsom has anything to say about it. Newsom is developing a plan to address the state’s economic Achilles heels, and build on its strengths. It will be unveiled at the end of July.

“California has got to get its act together when it comes to economic development and job creation,” he said.

While not all companies investing elsewhere are doing so for economic reasons, some are shopping around for lower costs, lighter regulations, stable leadership and government assistance and incentives.

The most popular places to go? Texas, Arizona, Colorado, Nevada, Utah, Virginia and North Carolina, said Vranich. All rank in the Top 13 places to do business, according to Chief Executive.

California has great weather and ample natural resources, but the far left Democratic nature of its politics is stifling to business.Unemployment is high and entitlement costs associated with this and rampant illegal immigration are a definite drag to business development.

I do not foresee the California business climate improving anytime soon. No matter what former Democratic Mayor of San Francisco Gavin Newsom says or creates with Nanny State commissions, businesses are voting wit their feet and leaving.

California’s economy will stagnate much like Michigan’s with little or no growth and for the forseeable future.

Flap’s California Morning Collection: June 27, 2011

Posted Posted in California, California Economy, Flap's California Morning Collection, Freedom of Speech, Los Angeles Dodgers, Texas

A morning collection of links and comments about my home, California.

Tabulations From a Survey of California Registered Voters about their Attentiveness to Government and Politics and the Media Sources They Use to Obtain This Information

A new Field Poll says there’s an uptick in the number of those who aren’t following government and political news.

The poll, out today, says about 25 percent of California voters say they pay attention to such news “only now and then” or “hardly at all.”

That’s up from 16 percent who said so in 1979 and 20 percent in 1999.

What do voters list as a main source of public affairs news? A majority, 56 percent, said television, while 44 percent said the Internet and 33 percent read newspapers.

And where are they getting that television news? Twenty eight percent said CNN, 22 percent said Fox, and 8 percent said Comedy Central’s The Daily Show.

Dan Walters: California vs. Texas provides very stark job comparison

On June 17, the California Employment Development Department reported a tiny decline – just two-tenths of 1 percent – in the state’s unemployment rate to 11.7 percent in May.

It was, to put it mildly, underwhelming, since a deeper look at the data reveals that the decline was not because payrolls had expanded markedly, but rather because the state’s labor force had shrunk as jobless workers gave up looking for work.

California’s “seasonally adjusted” non-agricultural employment had increased by a minuscule 2,000 in the preceding year while the “unadjusted data” showed a decline of 40,000 employed people from a year earlier.

The Texas Workforce Commission released a similar report on June 17 – similar in form, but decidedly dissimilar in tone.

Texas’ unemployment rate was 8 percent, two-thirds of California’s jobless rate, and its seasonally adjusted year-to-year job growth was a robust 2 percent (2.7 percent in private employment).

“We’ve added 92,300 jobs in Texas so far in 2011,” said TWC Commissioner Ronny Congleton. “That is a trend that we hope to continue until all Texans have good jobs earning good wages.”

Texas had fewer than a million unemployed workers in May while California had more than 2 million. Texas’ jobless rate was under the national average, while California’s was the second highest in the nation. Texas has accounted for nearly half of the nation’s job creation since 2009.

“Growth in the Texas economy is gaining steam,” says a recent analysis by the Federal Reserve Bank of Dallas. Clearly, Texas and other states are emerging from recession while California’s recovery, if it exists, is decidedly weak, as several new economic reports note.

Court overturns ban on video game sales to kids

The Supreme Court ruled Monday that it is unconstitutional to bar children from buying or renting violent video games, saying government doesn’t have the authority to “restrict the ideas to which children may be exposed” despite complaints that the popular and fast-changing technology allows the young to simulate acts of brutality.

On a 7-2 vote, the high court upheld a federal appeals court decision to throw out California’s ban on the sale or rental of violent video games to minors. The 9th U.S. Circuit Court of Appeals in Sacramento had ruled that the law violated minors’ rights under the First Amendment, and the high court agreed.

“No doubt a state possesses legitimate power to protect children from harm,” said Justice Antonin Scalia, who wrote the majority opinion. “But that does not include a free-floating power to restrict the ideas to which children may be exposed.”

Video game makers and sellers celebrated their victory, saying the decision puts them on the same legal footing as other forms of entertainment. “There now can be no argument whether video games are entitled to the same protection as books, movies, music, and other expressive entertainment,” said Bo Andersen, president and CEO of the Entertainment Merchants Association.

Dodgers file for bankruptcy protection

The Los Angeles Dodgers filed for bankruptcy protection in a Delaware court Monday, blaming Major League Baseball for refusing to approve a multibillion-dollar TV deal that owner Frank McCourt was counting on to keep the troubled team afloat.

The Chapter 11 financing permits the Dodgers to use $150 million for daily operations and buys time for the team to seek a media deal and ensure the team’s long-term financial stability, the Dodgers said in a news release.

“There will be no disruption to the Dodgers’ day-to-day business, the baseball team, or to the Dodger fans,” the statement said.

Dodgers players will be paid on Thursday, a source confirmed to ESPN’s Tim Kurkjian.

Baseball commissioner Bud Selig announced last week that he wouldn’t approve a Dodgers television deal with Fox Sports that reportedly was worth up to $3 billion. That left McCourt cash-starved and facing the prospect of missing the team payroll this Thursday, leading to an MLB takeover.

McCourt defended his running of the team, saying he had made it profitable and successful. He also said the Dodgers have tried for almost a year to get Selig to approve the Fox transaction.

“The Dodgers have delivered time and again since I became owner, and that’s been good for baseball,” McCourt said. “We turned the team around financially after years of annual losses before I purchased the team. We invested $150 million in the stadium. We’ve had excellent on-field performance, including playoff appearances four times in seven years.

“And we brought the Commissioner a media rights deal that would have solved the cash flow challenge I presented to him a year ago, when his leadership team called us a ‘model franchise.’ Yet he’s turned his back on the Dodgers, treated us differently, and forced us to the point we find ourselves in today. I simply cannot allow the Commissioner to knowingly and intentionally be in a position to expose the Dodgers to financial risk any longer. It is my hope that the Chapter 11 process will create a fair and constructive environment to get done what we couldn’t achieve with the Commissioner directly.”

Enjoy your morning!

Flap’s California Morning Collection: June 17, 2011

Posted 1 CommentPosted in California, California Budget, California Economy, California Unemployment, Flap's California Morning Collection, Jerry Brown

A morning collection of links and comments about my home, California.

The big news in California today is the Jerry Brown veto of the California State budget yesterday. A budget passed over the objections and votes of the California GOP. In other words, Brown vetoed (the first such veto in California history) his own Democratic Party’s majority passed budget.

So, what is everyone concerned about in the Capitol today?

Why, it is whether California Legislators will get paid.

Wow!

In the meantime, the California economy continues in a downward spiral and unemployment actually increased this past month.

No word on the ridiculous Amazon Tax, but I assume that it was vetoed with the California Budget veto yesterday. But, I could be wrong. How convenient for the Governor though.

On to the links…..

California loses 29,200 jobs in May, a blow to recovery

California’s economic recovery stumbled in May as employers shed 29,200 jobs from payrolls, a surprisingly large loss in a state that had been on the mend. The state’s unemployment rate still dropped to 11.7%,  from 11.8% the month before, according to numbers released this morning by the federal  Bureau of Labor Statistics.

The numbers follow a slate of bad economic news throughout the country. The nation added just 54,000 jobs in May, and its unemployment rate grew to 9.1%. The previous three months, it had added an average of 220,000 jobs a month. Home prices have dropped in California and the nation to surprising lows as sales slow.

California has the second-highest unemployment rate in the nation, after Nevada, although Nevada’s unemployment rate dropped significantly in May, to 12.1% from 14.9% the year before.

California had added an adjusted 14,900 jobs in April, after cutting a net 11,600 in March. It experienced five straight months of job growth from October through February.

“We do know that the picture is not terribly rosy,” said Johannes Moenius, an economist at University of Redlands.

Brown’s big budget bet

Gov. Jerry Brown’s veto of the new state budget Democrats passed this week represents a gamble that California’ deadlocked Legislature can find its way to a bipartisan solution that has evaded it all year.

Brown, in his veto message, blamed Republicans for refusing to go along with his proposal for a special election at which voters would be asked to ratify the extension of about $10 billion in taxes due to expire at the end of this month.

Brown also slammed his fellow Democrats, indirectly, by describing the budget they passed as filled with “legally questionable maneuvers, costly borrowing and unrealistic savings.” He noted that it would leave the state’s books unbalanced for years to come and add billions of dollars of new debt to the California’s already overburdened balance sheet.

But Brown’s rejection of the budget does not guarantee he is going to get anything better from the Legislature in the days and weeks ahead.

Republicans remain opposed to new taxes, and even to extending the temporary taxes that are about to expire. Democrats remain opposed to making the kind of spending cuts that would be required to balance the budget without those taxes. There appears to be very little middle ground.

Los Angeles Dodgers and Los Angeles Marathon: Judge extends McCourt talks, deal might be close

Superior Court Judge Scott Gordon on Thursday rescinded his finding that Frank and Jamie McCourt were at an impasse in their settlement talks, and he set a hearing for later today to determine if a deal had been reached. “I think we are close,” said Jamie’s lawyer Dennis Wasser, according to AP. “Hopefully, we can get it done tonight.

Dan Walters: If California legislators get paid, vetoed budget is giant charade

That presumes, of course, that the Democratic budget somehow put pressure on Republicans. In fact, it may have had the opposite effect of increasing their leverage on Brown to make concessions to get his centerpiece, an extension of expiring sales, income and car taxes, on the ballot.

A complicating factor is that Steinberg, Pérez and public employee unions really don’t want the fall election that Brown seeks on taxes, fearing – with good reason – that voters would reject them.

Still another is the new state law that strips legislators of salaries and expense checks, about $400 per day each, if a budget is not passed by June 15.

Controller John Chiang has appointed himself the law’s enforcer. Legislative leaders contend that Wednesday’s budget action complies, but Brown’s declaration that the budget was unbalanced gives Chiang grounds to stop the paychecks if he wishes.

Chiang was waffling Thursday, saying he wants “to complete our analysis” before deciding whether to pay lawmakers at the end of the month.

If Chiang pays legislators, the rejected budget will look like a giant charade by Democrats to evade the law.

Non-Californians at UC campuses get summer subsidy

A taxpayer subsidy that out-of-state students enrolled in the University of California system have been receiving for years is under scrutiny as the schools search for extra revenue.

During the regular school year, nonresidents pay up to three times as much as students from California, bringing the universities a few hundred million dollars. But partly due to measures taken to boost summer enrollment, they are spared from paying higher fees for summer classes.

“It seems out of sync,” said Steve Boilard, director of higher education policy for the Legislative Analyst’s Office.

Enjoy your morning!