When Joseph Vranich, the Business Relocation Coach who assists companies that want to leave CA testified March 19, 2010, at the “Legislative Summit of Jobs and Regulations in California” before Senator Hollingsworth, and Assemblymen Jeffries, Miller, Emmerson, Nestande, at the Riverside City Council Chambers in Riverside, he testified that he was aware of at least 112 companies that have relocated their businesses to other States, or did their company expansions in other States, but was only aware of a handful of companies that expanded in CA.
If and when the CA job market ever starts to recover, and the exodus of companies to other States and Countries starts to slow down, it will be driven by private industry entrepreneurs and businesses on the basic concept of getting a return on their invested capital (ROI). Successful businesses, providing products or services, and the jobs they create are the foundation of our tax base in the CA. Employed people buy cars and homes and further support the tax base in America. Putting an extra 40 pound rock on the backs of those industries in CA does not provide a level playing field for corporate America.
Unfortunately, CA is making great strides toward growing its image of not being business friendly. With CA’s extraordinary roadblocks from policies, processes, procedures, regulatory requirements, mounting bureaucracy, and special interest groups, this uneven playing field makes it tough to convince private industry to invest their capital in a State that virtually guarantees the lowest return on their invested capital.
It appears that Sacramento is totally unaware that the only obligation the “non government” corporations have is to get a return on their investment for the shareholders of the corporations. For example, the energy companies are not required to drill for oil in CA, nor are they required to process refined products such as gasoline, diesel, and chemicals in California for our daily use. They are however, obligated to provide their shareholders with a return on the corporations invested dollars, i.e., an ROI.
With the economy in the mess that it is, seems like more and more Legislatures are talking about creating jobs on one side of their mouth, and raising taxes to reduce the deficit on the other side of their mouths. These new “rocks” however, create an uneven playing field and makes other States and Countries more attractive for investments and the creation of jobs.
Many of the processes and taxes imposed and being proposed on the private sector could THEORETICALLY generate revenue for the State IF the businesses and jobs would stay put in CA and still generate projected revenues with these higher costs of doing business. Imposing more taxes on CA drilling, i.e., more rocks on the backs of industry, would theoretically generate revenue for CA, but it may also make other states or offshore locations more attractive for the private sector to invest in drilling which would result in lesser tax revenue to CA and a loss of more jobs.
CA has implemented the strongest environmental controls in the world, but that 40 pound rock has driven away businesses we had in CA and opened the door for States and countries with lesser environmental regulations, and permitting restrictions.
Rather than imposing more rocks on the backs of industry and fueling the exodus of investments and jobs from CA, Sacramento should be considering incentives and methods to create a level playing field with other States to keep the investments, jobs and technology HERE, while we transition to alternatives over the next few decades.
Ronald Stein, P.E.
Center for Entrepreneurship Board Member
Editor’s note: Ron Stein, Principal Technical Services, Inc testified how the uneven playing field that CA has implemented has adversely affected return on investments for private industry, and encourages companies, and the jobs they create, to seek other locations that are more business friendly with less regulations and taxes, to net an acceptable return on their investments.
The link to the 10 minute video is: http://arc.asm.ca.gov/member/66/?p=media&sid=165&id=2536