California reacts to Texas governor’s radio attack on business climate

150 150 John Guenther

Governors Rick Perry and Jerry Brown traded their takes on California’s business climate. (Photo Credit: Gage Skidmore &
Freedom to Marry / Flickr)

California officials went on the offensive after Texas fired another salvo at California’s business climate with Gov. Rick Perry launching a new radio ad campaign yesterday. The ads target California businesses and start running this week in San Francisco, Sacramento, Los Angeles, Inland Empire and San Diego.

Perry says in the ad copy that he’s heard building a business in California “is next to impossible.” The ad invites companies to visit a business relocation website run by the state’s economic development corporation.

“I can understand why Rick Perry is interested in California,” said Kish Rajan, Director of Governor’s Office of Business and Economic Development here in California. “We were the national jobs leader for most of the last year with 257,000 new private sector jobs.”

Gov. Perry’s ad continues with: “There are plenty of reasons Texas has been named the best state for doing business for eight years running.” The governor sums up those reasons, saying Texas’ “low taxes, sensible regulations and fair legal system are just the thing to get your business moving to Texas.” Well, technically those are three things. But who’s counting?

Gov. Jerry Brown fired back the same day, saying he thought the ads wouldn’t amount to much. “Do you think a few tricks from a politician is going to make any difference,” asked Brown. At an event today, he colorfully added“It’s not a serious story, guys. It’s not a burp. It’s barely a fart.”

Brown commented that a lot of people are coming to California to recruit business: “Everybody with half a brain is coming to California. So Texas, come on over!”

“But business relocations only account for 0.03 percent of annual job losses in California,” said Rajan. “At that rate of growth it would take 20 years to lose just 1 percent of our businesses to relocation. The reports show that no state has ever poached their way to long term prosperity. Real job creation comes from California’s history as a national leader in start-ups and the expansion of homegrown businesses.”

The new ad campaign was paid for by TexasOne, which also is financing Perry’s business recruitment trips to California. IRS forms show TexasOne is the primary program of the state’s economic development corporation. It’s being funded by corporations, smaller EDC’s and cities.

All conversation about Perry’s favorite pastime of slinging arrows at California aside, the campaign is still a good reminder of the need for a California statewide economic competitiveness plan.

California has been experiencing a mixed bag recovery, winning in total job gains overall and also making strong gains in total value of the economy, as shown in this chart from Next10…

…at the same time California has been lagging against Texas in plain, old unemployment and the employment-to-population ratio, shown in this chart.

Clearly there’s some important work to be done. The California Economic Summit is continuing its work this year to support creating a competiveness plan and working on other common sense initiatives, leading up to the Second Annual Summit at the end of this year. 

“The Summit is the only statewide mechanism to promote a jobs agenda that directly involves community leaders or a regional scale,” says Jim Mayer, executive director of California Forward. “If you don’t think we need a summit, just listen to Gov. Perry.”


John Guenther

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