The myth of the business exodus (from CA)

[question everything]

The Daily Breeze

Thursday, October 27, 2005

The myth of the business exodus

California prospered not on low taxes and wages, dirty water, potholes and rundown schools, but on the great investments it made in its infrastructure.
By Peter Schrag

There's long been cause to doubt the dire warnings from the Business Roundtable and other groups that, because of its bad business climate, California is, was or had been hemorrhaging jobs. The complaints were particularly intense in the early 1990s and then again during the campaign to recall Gov. Gray Davis two years ago. The theme was taken up not only by then-candidate Arnold Schwarzenegger in his call for jobs, jobs, jobs, but even more vehemently by Republicans Tom McClintock and Peter Ueberroth.

Businesses, it went, were fleeing California in droves in favor of more friendly climates in Arizona, Nevada and other states where taxes and energy costs were lower and regulations less cumbersome. Tom Campbell, Gov. Schwarzenegger's finance director, echoing similar warnings a few months ago, declared that more businesses were ready to decamp if the state couldn't balance its budget without tax increases.

But as a report released this week by PPIC, the fiercely nonpartisan Public Policy Institute of California, points out, the exodus never happened -- or happened in such tiny numbers that it was insignificant. (In the interest of full disclosure, I'm a member of the PPIC advisory council.)

(snip)

The PPIC report pointedly addresses such surveys by declaring that it's important "to be wary of anecdotal evidence of businesses fleeing the state to support arguments that California has an economic climate hostile to business." The governor mounted a loud campaign last year to bring businesses into the state. None of that seems to have made much difference.

(snip)

Peter Schrag is a columnist for The Sacramento Bee.


Find this article at:
http://www.dailybreeze.com/opinion/articles/1823026.html

[JDPriestly]

1. The flight was for tax purposes,

and California does not need birds who won't pay taxes. They don't really contribute anything. Let the gamblers in Nevada pay their way.