 |
 -0 |
 |
|
||||||||
 |
||||||||
 |
||||||||
|
||||||||
|
||||||||
 |
|
Business exodus from state looms In its annual Business Climate Survey, this year Forbes magazine included a new category: cost of doing business. Orange County ranked 129th out of 150 metropolitan areas, behind such top-ranked areas as Tulsa, Okla. and Omaha, Neb. Yes, other factors are at work. Those places don't have beaches, mountains and a balmy climate. For the overall business climate - including job growth, education and business costs - Orange County ranked higher, at 72. But compare those results to Forbes' list last year, before the new "cost of doing business" quality was factored in - Orange County ranked 10th overall and San Diego was first. For 2003, San Diego dropped to 27th overall and 129th for cost of doing business. On May 1, the California Chamber of Commerce and California Business Roundtable released their 13th annual Business Climate Survey. It asked questions of 400 businesses, more than three-fourths of them small firms with fewer than 250 employees. "Nearly one-fifth of California businesses are planning to expand and/or relocate outside of the state to relieve" cost pressures, according to a chamber summary. "The state's current budget crisis, skyrocketing workers' compensation costs and among the nation's highest electricity rates give renewed impetus to other states' hunting expeditions. And they're offering incentives that California is hard-pressed to match," the Register reported Thursday. The story cited ceramics maker Ceradyne, which may leave Costa Mesa for Lexington, Ky., where the state is offering $2 million in tax savings and the city promises expedited permits to build a new plant. Electricity rates are two-thirds less than the company pays here. The story also noted that "Irvine-headquartered Fidelity National Financial, the nation's largest title insurer, is headed to Jacksonville, Fla., hooked by $12.5 million in state-city incentives, lower land costs and what Chief Executive Bill Foley described as the 'oppressive cost of doing business' in California." "We're in a period of very sluggish economic growth," Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University, told us. The center's leading economic indicator series is forecast to rise just 0.6 percent for second quarter 2003 (annual rate) and could go lower. He warned that state tax increases, especially Gov. Davis' proposed half-cent sales tax increase, would reduce consumer spending and would be "especially regressive, hitting lower incomes more than higher incomes." Republicans in the Legislature need to "hold the line on taxes" to make sure the state economic climate doesn't get worse. It would be wise to examine these events in the context of what our columnist Steven Greenhut found during his trip to Sacramento last week: a tide of anti-business bills emanating from a Legislature that mostly has little understanding of, much less sympathy for, business, large or small. The word "contempt" is not too strong to characterize the Sacramento sentiment.
Right now could be the last moment Californians have a choice to avoid an economic calamity - during state budget negotiations, before too many anti-business bills take hold, before too many companies make the Fidelity National decision. State and local officials should realize that, even if they raise tax rates, they might not get higher collections if the businesses and high-income citizens that would pay the new levies have left.
|
|
|
