4/15/2009
| Opinion Editorial
Governmental Restrictions, High Taxes Driving
Businesses & Jobs Out Of California
Born in picturesque Carmel and raised in the Santa Clara Valley during the 1950s, David Semas has wonderful childhood memories of California. He grew to enjoy California as a young adult as well, becoming a successful businessman and assuming a leadership role as a Santa Clara County Planning Commissioner at a young age.
Despite the early achievements and prospects for a bright future, these days memories are the only thing linking Semas to his beloved California.
Hoping to launch a new company in the mid-1990s, Semas found the state's business standards far too restrictive and decided the state of Nevada would be better suited for the establishment of METALAST International Inc., a green technological chemical provider that helps serve the $60 billion global metal finishing industry.
Although he wasn't anxious to leave California, Semas feels the numerous environmental reports and the excessive red tape of the permit process would have taken three years for his company to begin operating. By deciding to put down roots in Nevada his business was up and running in one year.
"It's fair to say I never would have left California, but I grew tired of all the land use restrictions, the high taxes imposed on businesses, and the unfriendly business climate," he said.
A thriving business today, METALAST International Inc. is just one example of a company fleeing California. Many other companies have departed or simply steered clear of the Golden State over the past decade. It's an alarming trend with seemingly no end in sight.
Earlier this week at State Capitol in Sacramento, nearly two dozen California Republican legislators vowed to find a solution to the state's inability to keep businesses from leaving their borders and its failure to recruit new companies.
We announced a historic public forum will be held April 24 - and, unlike past forums, this one will be held in Nevada - asking businesses that have left our state to tell us why and what we can do to stop the flow of jobs from California.
Historically, California has not been a friend of small business owners. The Small Business Survival Index 2008 - which considers a state's public policies and their impact on small businesses - recently had California ranked 49th overall in terms of business friendliness. Meanwhile, Nevada was ranked No. 2, trailing only North Dakota nationally.
In a recent statement, Gov. Arnold Schwarzenegger said he was committed to providing relief to the state's unemployed and getting Californians back to work. Establishing a friendlier business climate would go a long way in accomplishing that goal.
Unemployment figures continue to rise throughout this country and California has certainly been one of the hardest hit. Heading into the second week of April, 537,988 California workers had lost jobs in 2009 and unemployment had risen to 10.5 percent, the highest level in more than a quarter of a century.
California is reacting quickly to utilize the $415 million in federal stimulus money, upgrading its job training and placement services at employment centers throughout the state. But the state is missing a key element. It should be doing all it can to keep existing businesses from departing the state while simultaneously trying to attract new business.
This is not a new problem. California has lost 523,500 manufacturing jobs since 2001, representing almost 30 percent of the state's industrial base. Over the past eight years, the state has lost nearly 600,000 private sector jobs overall, according to the Employment Development Department. In December 2000, there were 12.5 million private sector jobs. That total had shrunk to 11.9 by February 2009.
In the midst of a job crisis that has crippled the state, Republican legislators are working together to find solutions. Some hard issues are at the root of the problem and must be solved before California businesses stop walking out the exit door seeking greener pastures.
Heavy restrictions and high taxes are two of the prime causes that need to be addressed. It's time for some swift action to be taken or more jobs will be lost, and ultimately more California families and the communities they live in will be devastated.
Dan Logue, Assembly member representing California's Third District, is chairing the legislative forum in Reno.