FLASHREPORT

First went my sister and her family. Then followed my mother. Then my grandmother.  Even one of the cities I represent is looking at possibly going there.

Where?  Arizona.

As I mentioned in my last blog, although San Bernardino County's High Desert has a lot to offer in the way of incentives - from affordable land and labor to business-friendly local governments - the limits of our local discretion are illustrated by the economic struggles of the City of Needles, which I represent.

A small town located across the Colorado River from Arizona and Nevada, Needles was until recently studying the feasibility of seceding to one of the other two states because of California's higher costs for gasoline, workers' compensation insurance, auto insurance, corporate, sales and personal income taxes, and myriad overzealous laws and regulations, just to name a few.

"More power to 'em," I wrote, "although I'll continue to do the best possible job for them as long as they're in California."

But now I've re-thought that statement because of a recent Sacramento Bee article (URL: http://www.sacbee.com/business/story/1589487.html) that helps bolster arguments against increased taxes, spending and regulation in Sacramento by detailing other states' efforts to lure businesses away from California.  Case in point, the Arizona Department of Commerce's new marketing plan to do an even better job at it.

The business climate in California is one of the worst in the nation.  Our credit rating is dead last among all states.  And our unemployment rate is the third worst in the country, behind Michigan and Rhode Island.  While states like Texas and Arizona cut business taxes and provide incentives for companies to do business, and our state loses around 100,000 jobs a month, legislative leaders and the Governor - by entertaining tax increases - keep the future business climate in California even more uncertain.  In a free market society, uncertainty is the second largest inhibitor of growth, next to tax increases. 

If political leaders in California who are tinkering with the idea of raising taxes came out tomorrow and renounced their tax increase proposals, Interstates 80, 15, 40 and 10 would likely see far fewer outbound U-Haul trailers.  Unless that happens and more, I'm afraid, we will continuing to send retirement dollars to more and more residents of states that understand economics.

Since taxpayers and business owners have an alternative to the uncertainty surrounding the overall economy, not to mention the budget meltdown in Sacramento, many more will join those who have already left.  It's a perfect opening for Arizona's new marketing campaign.

None of this should affect how one feels about Arizona.  I think it's a great state.  In fact, I once had bought into Diamondbacks season baseball tickets, and it's clearly evident the Cardinals should have won the Super Bowl.  My hometown of L.A. doesn't even have a pro football team, which is embarrassing for the second-largest city. (Although USC is a pretty good substitute.) If I cared about basketball I'd be darn proud of the Suns.

Arizona is a pretty good place to raise a family.  And they have a state government that allows one sheriff to put inmates in tents and work them in chain gangs wearing striped dungarees.  It's also a place where illegal aliens are arrested and deported - a far cry from California, where we give illegals in-state tuition at our public universities and in some municipalities the cops are prohibited from even asking about immigration status (San Bernardino County excluded).

It's common knowledge that in addition to businesses, many retirees (like my grandmother) have long known that their money goes a lot farther when not eaten up by high tax rates and costs of living.  In fact, Arizona has a lot to be proud of.  They even had a Presidential nominee last year. 

So you might think that if they'd just knock off poaching our businesses, there'd be nothing to complain about with Arizona.  But when you really think about it, it's our own fault.

I'm not saying California doesn't have attributes that offset its competitive disadvantages.  But to apologists for the status quo, it's fair to ask how many jobs is an acceptable number to lose to other states.  Shouldn't we at least try to be competitive?

Here's one way.  Just for starters, have the Legislature pass a "Border Competitiveness Demonstration Act" that would roll back state laws and regulations to match those of Arizona and apply it to border towns, like Needles.  Then see if job growth on our side of the border increases to match or exceed the other side.  (It wouldn't be fair to do it with Nevada because they put casinos right on the border.)

I'm not predicting an outcome, but it would be interesting to see if the Legislature would be willing to entertain the question.  Just that would speak volumes.