Texas Gov Cashes In on California's Hostile Business Environment
Contrary to what you might’ve heard, I have nothing against California. In fact, I think it’s a beautiful state filled with creative people and a vibrant culture.
The problem for California, however, is that many of their business leaders do have something against the state — specifically its increasingly hostile business climate.
That’s why I worked with TexasOne to produce a radio ad directed at receptive employers, and it’s why I spent a few days last week traveling the Golden State, telling the story of a very different way of doing business.
The Texas Way.
The entrepreneurs who have spent a long time trapped under the yoke of high taxes and crippling regulations — and now face much more of both — were ready to hear what we had to say.
So we told them about Texas’ ranking as “Best State to Do Business” in Chief Executive Magazine’s annual survey of business leaders for eight years running. (California has been dead last in that survey over the same span.)
We told them about our top finish in CNBC’s 2012’s “Top State for Business” ranking. (California was 40th.)
And we told them about our efforts to hold the line on taxes at a time when Sacramento is not only raising taxes on businesses and individuals but is even shaking entrepreneurs down for back taxes on capital gains that they previously promised wouldn’t be owed.
There was an expected backlash to the trip and to our ad, some of it personal, much of it amusing, and a great deal of it erroneous.
But let’s be clear about this, if California weren’t treating its employers and entrepreneurs as a captive audience, these companies wouldn’t be interested in meeting with Texas in the first place.
That’s not just me saying that, either. In a survey conducted by the California Business Roundtable, 62 percent of California business leaders ranked their state’s economy as stagnant, and nearly 7 out of 10 said it was harder to do business in California than elsewhere.
Andy Puzder, CEO of the Carl’s Jr. restaurant chain, has said it takes about six weeks to go from permit application to construction on a new project in Texas. In California, he said, the same process takes more like eight months. Carl’s Jr., by the way, has been steadily expanding here in Texas.
Ron Middlestaedt, CEO of Waste Connections, has said he was impressed by how the state government in Texas works to support business growth, not impede it. Waste Connections, likewise, moved to Texas last year.
For their part, California leaders are attempting to slice up the data to indicate that things aren’t as bad as they seem in their state, and they are insisting that there’s little economic damage in businesses leaving their borders.
That would be almost amusing if there weren’t a real human cost behind the statistics. The fact remains California has fewer jobs today than it did 10 years ago, and it has lost 638,000 private-sector jobs over the past five years alone. In December, California’s unemployment rate was 9.8 percent, nearly two points higher than the national rate of 7.8.
For comparison’s sake, that month Texas’ rate was 6.1 percent, and it has been below the national rate for 72 consecutive months. (The last time California’s was below the national rate was in April of 1990.)
Despite all this, however, the ad and the trip were never about bashing California; it was about letting business owners know that there’s a state where we do business quite differently.
It’s a way of doing business that has resulted in a job growth rate of nearly 2.5 percent over the past year – best of the 15 largest states. It’s a way that has helped our home-grown businesses thrive, and encouraged employers from across the country and from around the world to relocate or expand here.
More than anything, though, it’s a way that has, over the past decade, brought gainful employment, and better lives, to millions of Texans – and newly-arrived Texans – throughout our state.
We need to keep that in mind this legislative session, and recommit to the fiscally conservative principles that have got us here. We also need to continue to invest in our world-class workforce and address our needs in water and transportation for years to come.
The decisions we make here in Austin will make a huge difference as we continue to attract employers from California and elsewhere.
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