California: 40% of Firms to Move Jobs From State 

Burdensome regulatory costs create bad climate for business

February 28, 2004
© 2004 WorldNetDaily.com

The business climate in California is so poor that 40 percent of the companies questioned in a report say they will move jobs out of state.

Half of the firms said they would not add jobs within California, according to the survey by the California Business Roundtable, the Sacramento Bee reported.

Mostly because of regulatory costs, doing business in the Golden State is 30 percent more expensive than in other Western states, said the report, which was based on interviews with executives at 50 California companies.

Regulatory costs in California are 106 percent higher than other states in the region.

"California is facing a critical downturn," said Jeff Melton, a partner in Bain & Co., a consulting firm that conducted the nine-month study, according to the Sacramento paper. "There are structural issues constraining the growth of the economy and a generation of wealth for its citizens."

Other business groups have issued similar warnings in an effort to lobby lawmakers, but the Roundtable contends its research was an unbiased effort to find out what is hindering growth in the state.

William Hauck, president of the Roundtable, said he would address the issues raised by the report with Gov. Arnold Schwarzenegger and legislators after the March 2 elections, the Bee reported.

The high cost of workers' compensation insurance and the approval process for building housing developments were among the biggest concerns brought up by the executives surveyed.

The study recommends overhauling workers' compensation and overtime laws, streamlining permitting processes and encouraging private investment in a new electricity infrastructure, the Sacramento daily said.

The paper said another study viewed California business in a more favorable light. An annual survey by the Milken Institute said California had seven cities in the top 20 places where the most jobs are created.

Stephen Levy, director at the Center for Continuing Study of the California Economy in Palo Alto, criticized the Roundtable report for ignoring other issues, such as the cuts in transportation funding and higher education, which he argues will make it harder for the state to compete.

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=37350