Jeff Miller's decision to move his family to Austin, Texas, says something about our state and opportunities elsewhere.
Miller was a Sacramento lobbyist with no shortage of clients, having worked at the fifth-largest firm in billings last year. He also was the California Republican Party's chief fund-raiser, until the state party unraveled.
There are more opportunities for a Republican in Texas than here. But in Austin, Miller will have a sideline: easing the way for California companies to mosey over to the Lone Star State.
"California companies that don't have their assets nailed to the ground are looking for relief from the state's escalating costs and regulatory mandates," said Miller, whose Facebook photo now shows him in a 10-gallon hat. Texas is "at the top of the list because of the incredible difference in the cost of running a business."
We've heard this before. The Wall Street Journal ran one of its periodic articles recently about the dreadful business climate here and how other states have set up California offices to lure employers.
On a sunny day in the Golden State, it's easy to dismiss such stories. The Public Policy Institute of California's research showed that from 1992 through 2006, 16,000 jobs annually moved into California and 25,000 jobs moved out. The net employment change from relocation was a blip, 0.05 percent of California's 18 million jobs.
But with the California economy and unemployment lagging other states, political leaders should pay attention to guys like Miller.
Yes, California claims to make an effort to attract jobs. The state has doled out billions since the mid-1980s to businesses that locate in so-called enterprise zones, areas where companies get tax credits for hiring workers. In the coming year, the state will give more than $700 million through enterprise zones. But the way the state spends that money is downright dumb. As the PPIC found, "enterprise zones have no overall effect on job growth."
California makes no disclosure about the companies that get the money. It's not clear whether the employers are Wal-Mart or high-end manufacturers.
The business of enterprise zones is lucrative, judging from the army of lobbyists, lawyers and accountants who work the bureaucracy to collect tax credits retroactively for people hired up to five years earlier. This army fights to protect the zones, as Gov. Jerry Brown found when he tried to kill the program two years ago. Unable to end it, Brown is preparing to release regulations to shave $50 million a year in costs by ending the practice of retroactively giving incentives for past hires.
That's a start, but hardly sufficient. Tax experts say there are smarter ways to spur job growth, such as exempting manufacturers from paying sales taxes when they buy new equipment. Or lawmakers could cut tax rates and broaden the tax base, helping all businesses without playing favorites.
As he develops the Austin end of his business, Miller will let businesses know about the Texas Enterprise Fund, similar to California's enterprise zones.
Unlike California, however, Texas names companies that get the awards, and lists the jobs they promise to create $480 million to firms that have added 64,000 jobs since 2004. That $480 million since 2004 is less than California spends in a year.
You'll recognize some of the recipients: Apple, Facebook, eBay, Hewlett-Packard and Hilmar Cheese.
The November election, in which voters raised taxes on high earners, might have been "the tipping point for many business owners and CEOs in California," said Miller.
Miller is doing nothing wrong. I wish him prosperity, though I hope he doesn't lure away California jobs. Mostly, I wish this state's leaders would recognize that good weather and foolish tax breaks won't turn around California's economy.
THE SACRAMENTO BEE