Rolling Up The Welcome Mat for Small Business in California
A recent article in the San Jose Mercury News told the story of the competition between several California cities to land a lucrative deal with Tesla Motors. The car manufacturer is looking at several potential Northern California sites for a new factory. As expected, these cities are pulling out the stops to woo Tesla to town – and the estimated 1,000 jobs they could bring with them. The state has already given Tesla a huge sales tax break and the locals will take it to a new level with promises of more incentives and flexibility. It makes one wonder – how much better would it be if California created a positive business environment that did not require big financial give-aways.
California has a reputation of being one of the worst – if not the worst – states for small businesses. Businesses – small and large – are continually confronted with a barrage of mandates day after day. Case in point – last year’s mandated healthcare plan proposed by Governor Schwarzenegger, but defeated in the legislature. AB1X included the largest single tax increase in California history – as high as 6.5 percent, to fund a government-run healthcare pool.
Removing Obstacles to Mexican travel will Help Strengthen U.S. Economy
Governor Arnold Schwarzenegger and fellow border governors from Arizona, New Mexico, Texas and various Mexican states have signed an agreement that urges the U.S. Department of Homeland Security (DHS) to remove obstacles to Mexican travel into the United States, and provides recommendations that will improve security and ease of travel.
Since Mexico is California’s number one inbound market, generating approximately $1.58 billion in spending, declines in that market would have a major impact on our economy, including loss of jobs. In my role as national chair for the Travel Industry Association, I’m also concerned about what impeding travel would mean to the U.S. travel industry and economy. Just a five percent decline in overnight visitation from Mexico would mean a loss of approximately 700,000 travelers and over $400 million in spending – with a disproportionate impact on America’s border states, especially California.
If it walks like a duck and it talks like a duck…
The Los Angeles County Board of Supervisors has approved Measure U for the November 4 ballot, and they are calling it a tax cut. I don’t remember the last time someone asked for my permission to “lower” taxes. Usually after a tax cut is signed, I see a press conference with elected officials telling us what a good job they’ve done and how they’re looking out for the taxpayer. So, why a vote from the L.A. County Board of Supervisors to “lower taxes”?
The Board proposes to lower the utilities tax rate from five percent to 4.5 percent for unincorporated portions of Los Angeles County. But, the Board seeks to expand the scope of what telecommunications services are taxed to just about everything except e-mail, which by law cannot be taxed (mark your calendar for 2014 for the federal sunset of this law). County officials say the revenue lost from the current 5% tax and the revenue gained from the 4.5% tax, should the measure pass, will be a wash. Really?
Public Education is Failing
Public education in California is remarkably expensive and a
spectacular failure.
For years, public education was a source of pride in California and
the envy of the other 49 states. However, decades of mismanagement
and poor decisions have dropped us to the bottom of the national
list, barely able to beat out such educational juggernauts as
Alabama, Louisiana and Mississippi.
A quarter of all California high school students drop out. That
number increases to one in three in the massive Los Angeles Unified
School District, with some high schools showing a more than 50%
dropout rate. For those students who do make it to their senior year,
more than 10% are unable to pass the California High School Exit
Exam. This ridiculously easy graduation standard requires students to
get 55% of 8th grade-level math questions correct and 60% of the 10th
grade-level English questions right.