Suppose you pick up your typical California newspaper and see headlines like, “State Unemployment Far Below the National Average” and “State Running Healthy Surplus; Gov. to Return Money to Taxpayers.” You just might find yourself paraphrasing Dorothy in the Wizard of Oz, “Sutter Brown, I’ve got a feeling were not in California anymore.” (For those not acquainted with Sutter Brown, he is California’s charming First Dog, who sometimes joins Governor Brown at press conferences.)
No, we certainly would not be in California where the unemployment rate is far above the national average and, although we are running a modest surplus, the only plans coming from Sacramento are for more government spending paid for by yet higher taxes.
Californians are telling pollsters they are not feeling either secure or confident. Two surveys taken late last year by the Hoover Golden State Poll found twice as many Californians reported being worse-off financially (33%) than better off (17%) over the last year; 2 out of 3 Californians predicted their state tax rates will increase this year, while 1% predicted a decrease; and only 1 in 7 Californians are “very confident” they can afford both higher taxes and other pocketbook expenses. And the fact that over a million Californians have voted with their feet — by moving to Texas, Nevada, Florida and other states not hostile to economic growth — is well documented.
Governor Jerry Brown has declared for reelection — his fourth term — promising more of the same, while his two declared Republican opponents are struggling to energize broad based voter enthusiasm. (In all fairness, neither is likely to generate the kind of financial support even close to that of Brown’s bankroll given his close ties to public sector unions).
Wisconsin Governor Scott Walker:
But if California had a more level political playing field, what kind of gubernatorial leadership provides the best model? Interestingly, a governor who, not long ago, was viewed as very polarizing, is now garnering favorable attention for bringing fiscal sanity to his state. Even though its weather can’t match California, let’s consider Wisconsin and Governor Scott Walker.
A January Marquette Poll shows 54% of Wisconsin voters see their state headed in the right direction, while 40% disagree. While this may not seem like an overwhelming vote of confidence, it must be considered in light of the ongoing public employee union jihad against Walker, who significantly restricted collective bargaining for government workers. This war on Walker has included an unsuccessful recall election that received tens of millions of dollars in union support from across the nation.
Still, Wisconsin has the advantage over California where we have the highest paid government employees in all 50 states. Walker has shown willingness to stand up to government unions, and is committed to cutting taxes and creating jobs. Contrary to the liberal spin machine, Walker confronted the unions, not out of spite or meanness, but because he realized that the very survival of his beloved Wisconsin was no longer assured given the sure path to bankruptcy it was on.
What is truly “Oz” like in the comparison between California and Wisconsin is the knee-jerk assumption by pundits in the main stream media that the sort of Republican policies advanced by Governor Walker help only the “wealthy.” These policies, we are told, only increase the gap between the “haves” and the “have nots.” But let’s look at where good, middle class jobs are being created. Not surprisingly, it doesn’t include California. Indeed, our hostile tax and regulatory climate has turned the central valley into a combination third world country and dust bowl.
No, real leadership would compel the governor of California — whoever that may be — to pursue those policies that eschew corporate cronyism (e.g., High Speed Fail) and are proven to grow an economy: reasonable taxation and a modest regulatory environment. Wisconsin has it. California doesn’t. And, by the way, we haven’t even talked about Texas yet.
Texas Governor Rick Perry:
To left-leaning politicians in Sacramento, Texas Governor Rick Perry – and the “Move Your Business to Texas” ads his administration sponsors – are about as welcome as Godzilla in Tokyo. The cause of this consternation is Perry’s pro-business record which exposes all the weaknesses of the California approach to governing. While Texas focuses on job creation, California lawmakers give their highest priority to reducing the calories in soft drinks. While Texas cut taxes last year, Sacramento is constantly searching for new ways to burden taxpayers.
For defenders of the California system, where the trivial is exalted and issues about which real people care are ignored, it gets even worse when Perry leaves. This is because so many California businesses are following him back to Texas. After comparing the two states and seeing that Texas’ taxes are lower, regulations are more reasonable and the legal system more fair, over 50 companies have relocated or expanded in Texas in the last year and a half. This business flight has shifted thousands of California jobs to the Lone Star State. And we are not just talking about small or insignificant businesses. Last month, oil giant Occidental Petroleum, a major presence in California for nearly a century, announced its relocation to Houston.
Ironically, apologists for California point to Texas’ unemployment rate of 6% — the national average is 6.7% — as a disadvantage to business. They suggest that California, with its 8.3 unemployment rate, is best for business because the pool of available workers is so much larger. This is like claiming that having only one hand is an advantage because you can make a pair of mittens last twice as long.
According to the Washington, D.C.-based Tax Foundation, the California business climate ranks 47th while Texas comes in at number 11. In every recent survey of CEOs, California rates at or near the bottom as a place to do business
Those who ridicule Perry for successfully poaching Golden State businesses might want to suggest to Jerry Brown that he make a similar effort in Texas. Let’s see, the governor could travel from city to city telling business leaders the advantage of relocating to California. His message: “We have Disneyland.”
Actually, in fairness to Brown, he is right that there is more venture capital in California and, indeed, one could argue that more ideas are incubated here. But for those ideas which take hold, they are more often than not realized in Texas. According to a TechAmerica Foundation report last month, Texas has now surpassed California in technology exports.
In the 19th century, those immigrating to Texas often painted “Gone to Texas” on their abandoned homes. If the California political class does not want to get a similar note from more businesses, they had better take their boot off the neck of our productive sector.
As we look forward to June and November elections, we should be asking those running for governor and the Legislature what they plan to do, not only to keep businesses and jobs in our state, but how they will work to attract new business investment that would improve the economy and put Californians back to work.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.