The trainwreck known as California
We’ve been fixated on the health-care fiasco for so long, we’ve lost touch with the rest of the world. Here’s a little story about businesses leaving California (where we live).
These are from the Orange County Register.
First, an Ace Hardware store closes after 33 years:
The Thoele family has owned an Ace Hardware store in Orange County since 1977 …
Declining sales, rising rents and increasing government regulations have combined with the presence of two Home Depots and two Lowes in the area to make it impossible to be profitable, Thoele said.
Building contractors were 10% to 15% of the store’s business, but most of them have disappeared.
… a series of costly new government regulations including:
- California’s lead-free law effective in January forced Thoele to remove hundreds of items from his shelves and replace them with higher-priced alternatives.
- Requirements for energy efficient light bulbs…
- AQMD has imposed paint regulations to meet air quality standards
- The agriculture department spent hours checking the nursery department for certain insects.
They’re not alone. Two O.C. company headquarters are leaving.
- TriZetto, a Newport Beach health management software company, has moved its corporate headquarters to Colorado.
- eEye Digital Security, which manages computer security for companies, has moved its headquarters from Irvine to Phoenix.
Both companies are keeping some divisions in Orange County.
The real news is about the 84 other companies that are leaving so far in 2010. That compares to 44 in 2009.
- 25 from Orange County
- 19 from Los Angeles County
- 16 from Santa Clara County
The companies are moving to Texas, Canada, Oregon, Tijuana, Pennsylvania, Colorado, Wyoming, Malaysia, Singapore, Tennessee, Las Vegas, Chicago, among other places.
The list is maintaned by John Vranich, a business relocation coach. He says
It’s no mystery what California’s problems are – high taxes, undue regulation, excessive fines and fees, high workers’ comp costs, a legal environment stacked against businesses, and lengthy permitting requirements.
Vranich’s site has a detailed list of the companies relocating or expanding out-of-state, going back to 2006. You’ll recognize a lot of names: Apple, Intel, Google, Yahoo, Fluor, Pay Pal, J. C. Penney, Hilton Hotels, Cessna, Coca-Cola North America, Lockheed Martin, ……..
One company gives its reasons:
King Kelly Marmalade in Cerritos was sold, the work shipped to Ripon, Wisconsin, and the local plant closed. The owner cited difficulties with regulations, fees, taxes and other government actions, saying to the Orange County Register, “At one point we started making copies of the different city, county, state and federal government agencies that we had to deal with . . . We posted their forms on one wall of the office. We quit at 44.”
Another company, Numira Biosciences, told the Register
“The tipping point was when someone from the Orange County tax (assessor) wanted to see our facility to tax every piece of equipment I had.” (It’s called the business property tax.)
“In Salt Lake City at my first networking event I met the mayor and the president of the Utah Senate, and they asked what they could do to help me. No (elected official) ever asked me that in California,” he said.
California seems to be at odds with the current administration, which tells us almost daily that their first priority is to “create jobs”.
… Obama signed legislation to jumpstart our economy, the American Recovery and Reinvestment Act, less than a month after his inauguration. The plan will save or create 3.5 million new jobs, make critical investments in our infrastructure and give 95 percent of working Americans a tax cut.
There are two problems with this pretty picture:
- We haven’t seen any of those 3.5 million jobs yet. A lot of them turned out to be Census workers, but obviously, they’re not working any more.
- The lowest tax rate goes from the current 10% to 15% starting in January 2011. No matter how you look at it, that’s a 50% increase for the bottom level.
As the old saying goes, what they do speaks so loudly, we can’t hear what they’re saying.