Note to California: Companies are Mobile, React to Taxes, Regs

More coverage of California’s economic woes, some inspired by the recent fact-finding, waking-up-call trip of legislators to Texas…

John Fund, Wall Street Journal, “California Dreamin’—of Jobs in Texas“:

Andy Puzder, the CEO of Hardee’s Restaurants, was one of many witnesses to bemoan California’s hostile regulatory climate. He said it takes six months to two years to secure permits to build a new Carl’s Jr. restaurant in the Golden State, versus the six weeks it takes in Texas. California is also one of only three states that demands overtime pay after an eight-hour day, rather than after a 40-hour week. Such rules wreak havoc on flexible work schedules based on actual need. If there’s a line out the door at a Carl’s Jr. while employees are seen resting, it’s because they aren’t allowed to help: Break time is mandatory.

“You can’t build in California, you can’t manage in California and you have to pay a big tax,” Mr. Puzder told the legislators. “In Texas, it’s the opposite—which is why we’re building 300 new stores there this year.”

Carl Guardino, CEO of the Silicon Valley Leadership Group, which represents more than 345 Silicon Valley chief executives, writes a Viewpoints column for The Sacramento Bee, “We should listen, learn from Texas.”

Last Friday, Fujitsu announced it was pulling out its entire California operation to move to another state. In the first 70 business days of 2011 – Jan. 1 through April 15 – 70 companies have left the Golden State. One company exits the state every business day.

Fourteen of the 70 have moved to Texas. Before readers draw the conclusion that companies solely leave for “low-cost states,” consider this – Fujitsu selected New York.

While such departures garner headlines and hand-wringing, these are the corporate losses – along with the loss in jobs and taxes – that are seen. The bigger threat – the reality I see and hear on almost a daily basis – is the thousands of jobs California companies choose not to develop in California when expansion and growth decisions are made. They represent the larger part of the iceberg that lurks well below the surface.

The Silicon Valley trade association has issued a white paper, “Policy Recommendations to Create CA Manufacturing Jobs,” that lists a series of “game changers” for adoption by legislative or administrative action. It’s a valuable contribution to the policy debates: California can indeed take a different path.

In The American Spectator, economist  Ron Ross writes, “California Descends Deeper Into Self-Destruction“:

The latest, all too typical, example is a law signed by Governor Jerry Brown last week mandating new renewable energy requirements for electric utilities in the state. The new law requires that 33 percent of electricity generated be done with “renewable” sources, essentially wind mills and solar panels, by the end of the year 2020. What’s the objective of this “ambitious” new regulation?….

A recent Public Utilities Commission study found that previously imposed renewable energy regulations have added $6 billion to what utilities have had to spend generating electricity since 2002. Has there been any measurable or identifiable benefit for spending that unnecessary $6 billion? The benefit-cost ratio of those expenditures is a close to zero as it’s possible to get. This has been absolute folly and we are about to multiply it by who knows how much.

Ross talks to Gino DiCaro of the California Manufacturers and Technology Association, who reports that industry in California already pays electricity rates about 50 percent higher than the rest of the country.

And here’s an interesting policy counterpoint coming from Gov. Rick Perry and reported by The Dallas Morning News, “Perry: Universities can help create a Silicon Valley in Texas”:

AUSTIN _ Despite his jabs at California, Gov. Rick Perry wants Texas to copy one of its crowning achievements and create a Silicon Valley in the Lone Star State, with the help of major universities.

Perry said the University of Texas and Texas A&M systems need to figure out ways to work more collaboratively to help establish a center of technological innovation in “creating, replicating the Silicon Valley concept here in the state of Texas.”

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