California delegation comes to Austin for answers

Rule #1 for medical first responders is "Stop the bleeding." A delegation of a dozen state officials from California visited Austin late last week hoping to learn how to stop the exodus of companies from The Golden State. Texas is one of the prime destinations for vacating Cali corporations. The American-Statesman's Kirk Ladendorf has the story:

"Over the past three years, California has lost 1.2 million jobs, while Texas has actually gained 164,000 jobs," said Assemblyman Dan Logue, a Republican from a district north of Sacramento who organized the trip. "Texas like everybody else was hit by the recession, but they are setting an example on how to grow their way out rather than tax their way out."

A key event for the delegation was a meeting at the Capitol with Gov. Rick Perry, who has made trips to California to lure companies and jobs to Texas.

His most recent coup: eBay Inc., which plans to add 1,000 jobs in Austin over the next 10 years, with the help of state and city incentives that were approved this week.

"I am a pro-business governor," Perry said at a media event before the private meeting. "The most important thing that a governor does is having the effect of keeping a positive business climate in the state. If you do not do that first, you can't do those other things very long," such as funding education, border security, public safety and other priorities.

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The day's agenda included a lunch session with Andrew Puzder, CEO of the company that owns the Hardee's and Carl's Jr. restaurant chains.

Puzder, whose company is based near Santa Barbara, created a stir in California earlier this year when he announced a major expansion in Texas, strongly criticized California's business climate and suggested that he might move his headquarters to Texas.

Puzder said Thursday that California's permitting process makes it hard for his company to build new restaurants there and that it is difficult to employ restaurant managers without running afoul of the state's restrictive labor laws.

While the Californians' visit, along with their taxpayers' money that the delegation spread around Austin's hotels and restaurants is appreciated, they didn't need a junket to the Lone Star State to tell them that their state's toxic business climate is the problem, and easing the corporate tax burden and harsh regulations would go a long way toward solving it. This is not the stuff of rocket science, but rather Economics 101. Ladendorf illustrates this in his report:

When he returned to California from Texas, Puzder said he received a phone call at home from Gov. Jerry Brown, who wanted to talk with him about improving the business climate in the state.

He said representatives of his chain have met with state officials recently and came up with a way to reduce the permitting process from eight months to six.

In Texas, Puzder said, the same process takes six weeks, and there are no arbitrary work rules that affect restaurant managers.

"You can't build stores in California, you can't manage them in California, and, even if you can build them, you have to pay a big tax," he said. "In Texas, you can build them and run them, and you don't have to pay (income) tax."

It's a shame that there were few Democrats among the fact-finding team from California. Republicans already know how to solve the problem, but Golden State Democrats still want to tax and regulate their corporate constituents to the point where it becomes more profitable to incur the costs of moving the company away from California to more business-friendly states. Until California's elected officials learn that it takes more than tiny Band Aids to perform serious triage, they won't be able to stop the hemorrhaging.

- JP