by Tina Grazier
California is in deep financial trouble and that ain’t good news. We have a legislature that doesnt have a clue and a governor that has realized without cooperation there is little he can do. The people of California pay the price for their incompetence and neglect. If we dont want it to continue we had better learn how to increase tax revenues while ensuring good jobs or we will find ourselves facing a tax burden that puts us all squarely in the poor house right along with our state government.
The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. – Ronald Reagan
The following story is but one in several thousand that will follow in the coming months. This one is about a group of chicken farmers that are facing expensive new regulation. The proposition in question, born of pressure from a small group of animal rights freaks, has the potential to drive these businesses and the jobs they offer out of our fair state:
Inland farmers are fighting a ballot measure to eliminate the cage system used in egg production, a change they say would drive the $337 million industry out of California, taking jobs and tax revenue with it. The farmers have joined forces and contributed to a million-dollar campaign to defeat Prop. 2 – Presse-Enterprise, Riverside, CA
You might say that surely a few egg farmers leaving the state wont hurt muchand besides, wheres the evidence that thousands will follow suit? Try THIS from an article by the editors of signonsandiego.com:
A new survey of corporate executives considering relocating their firms provides fresh reasons to worry about California’s economy. The Development Counsellors International survey found CEOs ranked California dead-last in attractiveness among the 50 states because of its high taxes and business-hobbling regulations. *** California’s reputation is likely to grow even worse in the next few weeks when a 2008-09 state budget is finally adopted, given the probability it will raise taxes. But what is truly depressing to contemplate is what happens come January 2011, when Gov. Arnold Schwarzenegger departs and is likely to be replaced by a Democrat. *** Democratic lawmakersrecently passed bills forcing employers to offer acupuncture coverage in their health plans, micromanaging meal times for private employees, increasing regulation of medical assistants and adding new costs to managed-care programs. Schwarzenegger vetoed all these measures on Aug. 1. Someday soon, we may have a governor inclined to go along with these assaults on business.
Revenue comes to the state from individual taxpayers, property owners and business. When business is highly regulated and taxed all three of these sectors are adversely affected. Regulation that requires a complete overhaul of procedure, as the caged chicken ban does, is expensive and cuts into profits. Less profit leads to employees layoffs and fewer workers means high unemployment and fewer taxpaying workers. At some point the burden on business becomes so great that its more equitable for a business to close its operation or move to a more business friendly state. This trickle down effect translates to falling revenues to the state from business, property owners, and taxpaying employees.
It isnt rocket science, yet our legislators continue to think they can continue to jerk business around, demanding more from them, without consequence to the state coffers. It never seems to occur to them that they should be better guardians of the peoples money and more mindful of the source of their revenues. Most, I fear, are too busy pandering for votes and lining their own pockets to care much about how their diddling affects citizens and government.
Californians need to wise up we probably cant stop the corruption and incompetence of current legislators but we can become better educated about what makes business work and revenues increase. We can become better informed and make sure our voices are heard. We can become a force to be reckoned with as PETA has been. A strong governor isnt enough. We (and he) need legislators who promise government restraint and reform and who follow through on their promises. We need legislators that are smart enough to place a lesser burden on business, not more. And finally, we need policies that attract businesses to California not send them scurrying away.