Now FL Gov. targets CA businesses

June 5, 2013

By Joseph Perkins

First came Texas Gov. Rick Perry. Then Utah Gov. Gary Herbert and Virginia Gov. Bob McDonnell. Now Florida Gov. Rick Scott is taking aim at California, reportedly considering leasing billboard space in selected markets here in the Golden State to take their businesses to the Sunshine State.

“I’m working on putting up a billboard out there that has Jerry Brown’s picture and mine,” said Florida’s follicly challenged governor, at a meeting last week of his state GOP. “It’s going to say,” he half-jested, “‘Same haircut, no income taxes. Number One in teacher quality. Move to Florida.’”

Back here on the Left Coast, the Brown administration was not amused. “The way you build a dynamic economy like California isn’t by running around trying to poach other states,” Riley Ray Robbins, deputy director of communications for the governor’s Office of Business and Economic Development (GO-Biz), told a Florida newspaper.

Gov. Scott, the former CEO of Columbia/HCA, which he grew into the world’s largest health care provider, begs to differ with Mr. Robbins. “We compete with 49 other states,” he said. “They want more jobs in their state. I want them here. I’m out recruiting every day to get people to come to our state.”

California is a ripe target for Gov. Scott and, before him, fellow Govs. Perry, Herbert and McDonnell. Not just because California boasts some 53 Fortune 500 companies, including such well-known brands as Google, Apple, Facebook, eBay, Helwett-Packard and Visa, but also because of perception that the Golden State is not especially hospitable to business.

“Thank goodness for California,” said Scott, noting that the Golden State recently raised its income taxes, while continuing to have the nation’s fourth-highest jobless rate.

No income tax, more jobs

By comparison, the Sunshine State has no income tax. And its jobless rate is nearly two percentage point lower than California’s. “Unlike Florida,” said Gov. Scott, “it is clear California does not have a climate for business to succeed.”

Now, it’s unlikely that the letter writing campaign Gov. Scott launched last month targeting an unspecified number of California businesses will lure any of the aforementioned Fortune 500 companies to Florida.

But it is entirely possible that some of those California companies, as well as some of the state’s smaller, but fast-growing companies, will expand their operations not here in Golden State, where they are headquartered, but in states like Florida, Texas, Utah and Virginia.

The way to defend the state against poaching of its homegrown companies is not with trash talk, at which Mr. Robbins appears adept, but by Gov. Brown and the Legislature taking meaningful steps to improve the state’s business climate.

That means reducing California’s corporate taxes, the nation’s third-most onerous, according to the Tax Foundation, not to the nation’s lowest, but at least somewhere closer to middle.

It also means rolling back the state’s excessive regulations which, according to a report by two Cal State Sacramento researchers, cost the average small business nearly $135,000 (as of 2007), while reducing statewide employment by 3.8 million jobs.

California is coasting on the reputation it once enjoyed as a great state in which do business. Until it re-earns that reputation, rival states will continue to aggressively woo California businesses.