Texas Trip Confirms: California Needs a Plan to Create Jobs

Jack Stewart
Board Member, National Alliance for Environmental Reform and former President of the California Manufacturers and Technology Association

California has an unemployment rate of 12 percent, lost 11,600 jobs
last month and has no plan for creating jobs for the more than two
million California workers who are looking for work.  Texas has an
unemployment rate of 8.1 percent, created 37,200 jobs last month and
has an aggressive plan for investment and job creation. 

Last week provided an eye-opening look at some of the important
differences between California and Texas for a delegation of
California legislators, Lt. Governor Gavin Newsom and business
association leaders who traveled to Austin, Texas on an economic
development fact finding mission.

The mission was conceived by Assemblyman Dan Logue who arranged for
ten legislators to spend two days in Austin talking to California
companies who had recently moved or expanded operations in Texas. 
The group also met with Governor Rick Perry, officials from his
administration and members of the Texas Legislature.

The big take-away from the two days in Austin was the commitment
Texas has to providing a positive business climate for its employers
and to creating job opportunities for its workers.  That commitment
appears to start with Governor Rick Perry, who prides himself in
saying, “creating
and growing employers is his number one job
– with a healthy,
growing economy other problems become less daunting.” 

There is no question that Governor Perry is the quarterback of
Texas’ economic development team.  His enthusiasm and commitment
permeates a state bureaucracy where government agencies are
sensitive to employers who are willing to invest in Texas.  Governor
Perry leads regular economic development missions to California, New
York and other states and nations to recruit employers who bring
jobs to his state.

The Texas economic development strategy was born out of the 2003
recession when state revenues dropped, creating a massive budget
deficit.  To address the 2003 crisis, Perry made two decisive
moves:  1. to aggressively promote Texas’ affordable business
climate to grow revenues to the state through economic expansion; 2.
move the state to a zero-base budget process to control the growth
in government spending. 

His plan appears to be working.  While it’s difficult to understand
all aspects of the Texas business climate in just a few days, the
U.S. Bureau of Labor Statistics shows solid job growth in Texas over
the past decade, while California’s job numbers are far below its
2001 levels.

 

This is not to say Texas has all the answers or that California
doesn’t have its own set of attributes, but the fact is California’s
business climate is very unpredictable and investors shy away from
unpredictability. Texas places a high premium on a predictable
business climate and investors seem to agree.

Over the past few months, I‘ve often greeted California legislators
by saying, “Without having heard one of your campaign speeches or
read a single piece of your campaign literature, I’m certain your
number one campaign pledge was to create jobs.”  The response is
always a big smile and an affirmation that my guess was correct.  My
following  comment is, “Now that you’re here, you have no idea how
you’re going to fulfill that promise.”  I typically get a very sober
response, confirming that my second observation is also correct.

California hasn’t had an economic development strategy for more than
a decade.  We’ve been resting on our laurels while other states and
nations aggressively recruit our brightest and best entrepreneurs
and innovators.  It doesn’t have to be this way.  California can
become competitive for investors if we put our economic house and
business climate in order.

For the past ten years, our Governors and Legislatures have focused
on spending cuts and tax increases as the solution to our state’s
economic woes.  There is a third leg to that stool, an aggressive
plan for economic growth.  If job creation is truly our highest
priority, then let’s create a plan to grow jobs.  Look to the future
as Governor Perry did in 2003, set job creation goals for the next
15 years and develop a strategy to achieve those goals.  It’s
simple, but it won’t be easy.

 

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