The banter between California Gov. Jerry Brown and Texas Gov. Rick Perry the past few days -- mostly playful but also occasionally acidic -- has generated attention for an event that otherwise might not have received much at all. Perry is coming to California today on a now well-publicized visit to convince California businesses that Texas is where they want to be.
Corporate head hunting visits by official operatives hoping to lure away industry are not uncommon but this raiding party involves two of the nation's most politically opposite states -- and governor. The Perry camp has taken out a radio ad that's clearly a swipe at California, touting Texas' "low taxes, sensible regulations and fair legal system." Brown poured gas on the fire by calling the Perry ad "barely a fart." And the battle was on.
Entertaining? Definitely. But the sparring underscores the serious social and economic issues at play here. Both states have some critical issues to contend with.
California's Democrat-controlled legislature needs to take a good hard look at the factors that make the Golden State such a tempting target for these raiders. We can start with the California Environmental Quality Act. As well-intentioned (and often effective) as the CEQA may seem, it is frequently used as a development filibuster -- an abusive misuse of the law, as stated here before, that creates roadblocks intended solely to slow and eventually kill projects. That's just one of the factors that has earned California a reputation as an overregulated state that is unfriendly to business.
The overall business tax climate, as graded by the Tax Foundation's composite of taxation that impacts business, and Texas has another attractive argument for relocation: Texas is ninth best in the U.S. and California is 48th -- or third worst .
But the Lone Star State is not exactly a bed of yellow roses, as California officials would be wise to point out. People who move from California to Texas don't fare nearly as well financially as they might have hoped. The Sacramento Bee reports that the average household income of Californians who moved to Texas was about $49,000 in 2010, compared to $61,000 for those who stayed.
The Bee also reported that the 2011 unemployment rate among Californians seeking better things in Texas was about 16 percent, compared to 12 percent among those who stayed put in California.
Business experts, along with the weight of statistical evidence, indicate that Perry's visit will do little to lure business away. A 2010 study by the Public Policy Institute of California reveals that during a 14-year period, from 1992 to 2006, relocations accounted for just 1 percent of job gains and 1.7 percent of job losses in California.
But the barbs between the two governors certainly have folks paying attention. If it causes the California Legislature to take a little harder look at how business is done in this state, so much the better.
Welcome, Gov. Perry! Enjoy your visit.