California Dreamin'—of Jobs in Texas

[WestVirginiaRebel]

Wall Street Journal:

It wasn't your usual legislative hearing. A group of largely Republican California lawmakers and Democratic Lt. Gov. Gavin Newsom traveled here last week to hear from businesses that have left their state to set up shop in Texas.

"We came to learn why they would pick up their roots and move in order to grow their businesses," says GOP Assemblyman Dan Logue, who organized the trip. "Why does Chief Executive magazine rate California the worst state for job and business growth and Texas the best state?"

The contrast is undeniable. Texas has added 165,000 jobs during the last three years while California has lost 1.2 million. California's jobless rate is 12% compared to 8% in Texas.

"I don't see this as a partisan issue," Mr. Newsom told reporters before the group met with Texas Republican Gov. Rick Perry. The former San Francisco mayor has many philosophical disagreements with Mr. Perry, but he admitted he was "sick and tired" of hearing about the governor's success luring businesses to Texas.

Hours after the legislators met with Mr. Perry, another business, Fujitsu Frontech, announced that it is abandoning California. "It's the 70th business to leave this year," says California business relocation expert Joe Vranich. "That's an average of 4.7 per week, up from 3.9 a week last year." The Lone Star State was the top destination, with 14 of the 70 moving there.

Andy Puzder, the CEO of Hardee's Restaurants, was one of many witnesses to bemoan California's hostile regulatory climate. He said it takes six months to two years to secure permits to build a new Carl's Jr. restaurant in the Golden State, versus the six weeks it takes in Texas. California is also one of only three states that demands overtime pay after an eight-hour day, rather than after a 40-hour week. Such rules wreak havoc on flexible work schedules based on actual need. If there's a line out the door at a Carl's Jr. while employees are seen resting, it's because they aren't allowed to help: Break time is mandatory.

"You can't build in California, you can't manage in California and you have to pay a big tax," Mr. Puzder told the legislators. "In Texas, it's the opposite—which is why we're building 300 new stores there this year."

Other states are even snatching away parts of California's entertainment industry. The Milken Institute, based in Santa Monica, Calif., reports that 36,000 entertainment jobs have left the state since 1997. The new film "Battle: Los Angeles," which is set in California, was filmed in Louisiana.

"The red tape is ridiculous," says Mark Tolley, the managing partner of B. Knightly Homes, which relocated to Austin from Long Beach in 2005. "Regulators see developers as wearing a black hat and the environmental laws have run amok."

"I'm a pro-jobs Democrat," Mr. Newsom told me. "My party needs to get back into the business of jobs." Mr. Newsom says he's developing an economic development plan to present to Gov. Jerry Brown, who he says "gets it" on the need for business-friendly policies. Mr. Newsom told me that what impressed him most about Mr. Perry and the Texas legislators was their singular focus on job creation.

California, by contrast, seems to constantly lose focus. Several Democrats who agreed to go on the Texas trip were pressured by public-employee unions to drop out—and many did. And just as Texas business leaders were testifying about how the state's tort reforms had improved job creation, word came of California's latest priority: On April 14, the state senate passed a bill mandating that all public school children learn the history of disabled and gay Americans.

One speaker from California shook his head in wonder: "You can have the most liberated lifestyle on the planet, but if you can't afford to put gas in your car or a roof over your head it's somewhat limited."
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The cost of being "Liberated..."

[Sanguine]

The really funny thing is that they went to the non-Texas part of Texas for answers. The rest of us work to support Austin; not the other way around.

 

 

One speaker from California shook his head in wonder: "You can have the most liberated lifestyle on the planet, but if you can't afford to put gas in your car or a roof over your head it's somewhat limited."

 

Priceless.