California Business Exodus Now Triple Last Year’s Rate
In executive coaching, there is a saying: "The problem you define is
the one you solve." Based on what I’ve seen, California is in serious
trouble because many people refuse to admit to one of our big problems
– the flight of businesses, capital and jobs to other states and
nations.
Good information about the phenomena is hard to come by. Hence, out of
frustration, a year ago I began compiling a list of what I call
"California Disinvestment Events."
The new compilation shows that 144 companies have fully or partially
engaged in such events during the first three quarters of 2010, nearly
triple the 51 companies discovered for all last year. You can see the
list of companies that disinvest along with explanatory context here.
Proposition 25, Taxes and the Brooklyn Bridge
The Yes on Prop 25 campaign’s new TV commercial emphasizes the measure does not raise taxes and punishes legislators if the budget is late.
The No on 25 side (of which I am a part) points out the legislators can avoid the punishment of no pay for failure to produce an on-time budget if the majority simply passes a sham budget, whether the governor signs it or not.
But, it is the tax issue that should receive the focus of voters. While there is a dispute whether taxes can be raised directly through the mechanism of Prop 25, there is no question revenue can be raised to cover the spending in a majority vote budget through increases in majority vote fees, which in many cases are disguised taxes.
L.A. Localizes Bad Policy
Some
city of Los Angeles
officials recently proposed an ordinance that would give preference to local
companies when the city buys some good or service. It’s a
well-intentioned, feel-good measure that’s a bad idea.
The
ordinance would give local businesses an 8 percent advantage when they bid for
city work. So in a low-bid contract scenario, a local firm’s bid of $1
million for a city contract would be considered a bid of $920,000. And in a
request-for-proposal scenario, in which bidders are assigned points, a local
business that got 100 points would be considered to have 108 points. Obviously,
that would give local companies a leg up when they’re bidding against
nonlocal companies.
"For
too long, the city of Los Angeles has awarded contracts to private companies
without considering if any of those funds will filter back into the local
economy," City Council member Bernard Parks was quoted as saying in a
city press release.