California, the Golden State, seems to be in an economic tailspin. It has massive revenue shortfalls--$21 billion out of a $100 billion annual state budget.....and there is no resolution in sight. One of the key reasons for this seemingly economic death march is the subject of an Op-Ed in today's Sacramento Bee by Jack Stewart, President of California Manufacturers and Technology Association.
The Subject: California's strangling government regulations, smothering inspections and general attitude of regulators toward employers...and the legislature's failure to reign in the bureaucrats.
Sound familiar?
Since 2001, California has lost nearly a third of its manufacturing base, a 32 percent decline in just eight years. The impact has been devastating: 600,000 lost jobs, $75 billion a year in lost wages and $5 billion annually in lost tax revenue, money that once helped balance the state's budget.
What about all of those green jobs to replace typical manufacturing jobs, Stewart writes: "with state's emphasis on green jobs, they still account for less than one percent of the state's workforce.."
Stewart wrote:
Manufacturing and other companies are leaving California or failing to expand, in large part, because of the state's notoriously expensive and uncertain regulatory environment. Businesses are afraid to invest here because the rules keep changing while the cost of compliance spirals ever higher.
Even Trend Magazine has weighed in saying:
"It's difficult for most employers to make a solid case for starting up or expanding business in California. Government regulations seem perversely aligned to discourage people from doing business here. Last year one California company told the Legislature it had been inspected by regulators 165 times in 2008, nearly every two days, and that inspections had increased another 26 percent in 2009. Reports like this scare other companies away."
Stewart concluded: "
"If we're serious about reversing California's reputation as a lousy place to do business, we need to get serious about regulatory reform. We don't need to dismantle environmental, worker or consumer protections to improve California's regulatory climate. But we do need to remake the system so it's lean, efficient, predictable and accountable, with common-sense rules that are fairly applied. It's a smart way to begin repairing our image (and our economy) because it can be accomplished quickly and without costs......"
If we are not careful and don't pay attention to our regulatory climate, it will be: "Ditto for Washington!"
Don C. Brunell, President (DonB@awb.org)
